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Chinese gold market deregulation in 2001
PRESS TRUST OF INDIA
Shanghai, March 19: The first phase of the deregulation of China's gold market, expected during the first half of this year, has been pushed back to 2001, sources said. In a report confirmed by Central Bank officials, the Shanghai daily said the establishment of a gold exchange - considered the first step toward abolishing the state gold monopoly - had been delayed.It quoted Roland Wang, the World Gold Council's manager for north China, as saying the decision was due to unresolved "technical considerations". These include the rate of value-added tax to be imposed on gold miners and processors, who are currently protected by state-fixed prices." The work is hard, because China has many small mines," Wang said.A Shanghai-based official with the central People's Bank of China confirmed that a delay to next year had been decided." This news is reliable," he said. "China's gold market will open; deregulation will start, but not yet in the future." China mined 170 tonnes of the precious metal in 1998, but the production is divided up among some 1,200 small and often inefficient mines using out-of-date technology. The industry has been coddled by special government treatment, including low-interest loans, subsidies and tax exemptions. In addition, the government has typically set prices above international levels. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
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