Following China's official loosening up of its gold market this
year, its gold jewellery industry is being urged to make immediate
improvements to the quality of its designs and manufacture.
Lu
Wenyuan, secretary-general of the China Gold Association, told
China Daily that with a legacy of 50-plus years of government
monopoly of the gold market, China's gold jewellery trade lags far
behind that of the international market.
"We are still accustomed to selling gold jewellery in accordance
with its weight, but such a price-setting system caused the makers
to ignore the value of technically creative designs in their
products," Lu said.
However, on the international market gold jewellery is regarded as
an artistic work and each piece needs to be priced on this basis,
not simply its gold weight.
"The price of gold jewellery reflects the values both of the gold -
the raw materials of the product and the design and manufacturing
techniques," Lu said.
According to official statistics, for the world's leading gold
jewellery makers, the cost of design and manufacturing usually
makes up 30-40 percent of the cost as a whole.
"But in China, that cost may be nearly zero, as the producers
compete to reduce the unit price of gold jewellery to attract
customers," said Lu.
This short-sighted price competition on gold jewellery has resulted
in rough and slipshod manufacture.
The government lifted its controls on the price of jewellery in
1998, but because of its control of gold, the jewellery market
could not operate fully under market principles.
"That situation has changed, however, after the launch of the
Shanghai Gold Exchange on November 1, a signal for China's full
liberalization of its gold market," Lu said.
Gold jewellery processors should register to become members of the
exchange and get gold at market price.
"The price on the gold exchange basically fluctuates in line with
changes on the world's gold markets, mainly London's," explained
Lu.
Under China's commitments to the World Trade Organization (WTO),
the gold jewellery business is among the first batch of industries
to open to the outside world. This means that the main players on
the international stage will target China's rather backward
domestic market bringing with them well-designed and elaborately
crafted products.
Compared with foreign competitors, the majority of China's gold
jewellery companies are small or medium-sized and still operate on
a workshop-based style.
"The backward machines, skills and management methods leave them in
a difficult position," added Lu.
The China Gold Association has decided to consolidate the industry
via acquisitions, mergers and reorganization to enhance its
comprehensive competitiveness.
The association was formed to help those competitive-minded gold
jewellery manufacturers to bring in foreign capital, talent,
equipment, along with the very latest technology, so that the
domestic industry can more fairly compete with the inevitable
international competition.
Last month, the first national gold jewellery design contest was
launched, in a bid to encourage designers to be innovative and
improve their skills and by so doing, better China's gold jewellery
industry.
(China Daily December 9, 2002)