China to Relax Gold Market to Investors

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Last updated at: (Beijing Time) Thursday, June 27, 2002

China to Relax Gold Market to Investors

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China will relax limitations for Sino-foreign co-operation in the technology, equipment, capital and human resources areas of gold exploration, smelting and processing, as part of its opening up of the gold industry.

The announcement was made yesterday at the opening ceremony of the China-South Africa Gold Technology and Equipment Co-operation & Trading and Investment Talks.

The three-day event is taking place in Zhaoyuan of Shandong Province, also known as the Gold Capital of China because of its annual gold production, which tops the country and reaches 40,000 kilograms.

Cheng Fumin, president of the China National Gold Bureau and chairman of the China Gold Association, said Sino-foreign co-operation in the gold sector may involve direct investment on gold resources exploration, introduction of advanced technologies - especially for treating refractory gold ores, and marketing and financing personnel training.

Cheng added that, according to guidelines recently issued by the central government, China encourages foreigners to develop and process low-grade and refractory gold ores in China as well as invest in gold exploration in the country's western regions.

"Although other gold resources are still limited, foreign investment is allowed after getting sanctioned from related State departments," said Wang Zhixiao, executive vice-president of the China National Gold Corporation.

Complete law system for gold industry urged

China will also allow foreign investors to carry out risk exploration of gold resources in the western regions.

Wang acknowledged that, due to the policy limits and the closed gold market in the previous decades, no significant achievement in developing domestic gold resources in co-operation with foreign companies have been made yet.

"The government is urged to establish a complete and transparent law system on the finance, tax, import and export and environmental protection for the gold industry, which may do great favour in standardizing the market and providing confidence for investors, Wang said.

Nitesh Dullabh, manager with the Trade and Investment Department of South Africa, was optimistic about the future of the co-operation between the two countries.

"The combination of rich gold resources in China and our advantages in technologies, equipment and experiences will lead to mutual benefits for both of us," Dullabh said.

China's gold production hit 118 tons last year, making it fourth in the international market. So far, South Africa is the world's largest gold producer with the maximum annual gold production of 1,000 tons.

Last November, the Shanghai Gold Exchange started its pilot operation, which was regarded as the first stage of the country opening its gold market to the world.

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