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China to Reform Gold Management System
China is going to abolish its planned management system for the unified purchase and distribution of gold and to set up a gold market in its stead, said Dai Xianglong, governor of People's Bank of China.
Dai said that to reform the system aims to give full play to the basic role of the allocation and regulation of gold resources and promote the sound development of gold production, circulation and consumption.
For a long time, China has instituted the planned management system featuring "unified management, purchase and distribution". This system, under a particular period, had played a positive role in stabilizing financial prices, supporting gold production and guaranteeing gold supply needed in the country's economic development. However, along with the establishment and development of the socialist market economy, the problem featuring the lack of pressure and vigor for gold production and operation brought about by planned management has become increasingly conspicuous and has, to some degree, hindered the further development of the industry in gold production, processing and sales. It is therefore imperative to reform this system.
Dai said that the basic ideas in reforming the system are: to set up a gold market to replace the aforesaid planned management system. The main contents include: first, to cancel planned management of gold. set up a gold swap market in Shanghai in the form of a membership system. Second, to abolish the licensing management system for the business such as retail, wholesale, processing and management. Third, to relax control on gold imports in light of the process of foreign exchange system reform. Fourth, to establish and perfect new laws and regulations on gold circulation and management.
Currently, the People's Bank of China is actively carrying out various items of preparatory work in line with the general arrangements for the reform of the gold management system. Firstly, it steps up work related to the organization of a gold swap market. Together with concerned departments and on the premise of full discussion and proof, it will draw up a whole set of programs, which will begin to be put into trial operation in the latter half of this year upon approval from the State Council. Secondly, it loses no time in formulating the Provisional Regulations on the Management of Gold". In the meanwhile, it will start up the gold quotation system as quickly as possible, formally carry out the purchase and distribution of gold; it will intensify efforts to adjust the current gold management policy, to ensure that the gold retail business license system is abolished in the first half of this year.
By PD Online staff member Li Yan
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