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Gold Exchange in Shanghai May Be Coming
China plans to establish a National Gold Exchange (NGE) this year, another step towards reforming its gold trading market.
Today's China Daily reported that a nine-member panel has been formed in the central government to lead and plan details for the establishment of the exchange. A preparatory committee will be formed soon, it said.
Shanghai is the most likely location for the exchange, though the central People's Bank of China (PBOC) would not confirm this early last month.
For years, gold trading has been strictly controlled by the central government. PBOC monopolizes the purchase and allocation of gold. China's gold prices are separated from the international market and rarely fluctuate.
The upcoming NGE, which would mainly target gold producers and wholesalers, would introduced market prices to China's gold trade.
The central bank would gradually withdraw from its monopoly position.
A retail market for gold would then be established, the newspaper's source said.
People in the industry welcome the possible establishment of an NGE in the city. Shanghai Mayor Xu Kuangdi ranked it a top priority in his speech about the 10th Five-Year Plan (2001-05), delivered to the 11th local People's Congress.
"It (NGE) will help Shanghai become established as an international financial center," said Mao Wen, a manager from the World Gold Council Shanghai Office.
China produced about 173 tons of gold and used about 207.5 tonslast year.
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