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China's long-awaited gold exchange is expected to start operation late this month in Shanghai, now that detailed rules governing the value-added tax on standard gold trading have been clarified, exchange sources said Sunday.
The establishment of the Shanghai Gold Exchange in 2001 was viewed by many as a significant step forward in China's deregulation of the precious metal.
However, the official start of operations of the gold exchange has been postponed several times, due to a lack of detailed rules for implementing the policy on refund-on-payment of value-added tax on standard gold transactions.
Preparations for the exchange's official startup are basically completed, and the a fore-mentioned regulations have been approved by the Ministry of Finance and the State Administration of Taxation, said an official in charge of the exchange.
The gold exchange will serve as a marketplace for such rare metals as gold, silver and platinum, monitoring their trading, clearance and distribution, and exercising risk control over market operations. It will also determine proper prices for transactions and release market information, playing a major role in establishing a link between the domestic gold market and those in other countries.
The exchange will also provide advisory services for individuals who wish to buy and sell gold.
A membership system has been adopted for the Shanghai Gold Exchange. Exchange members will consist of financial institutions registered in China and ratified by the country's central bank to trade on gold, and also of corporate entities that deal in the production, smelting, processing and wholesaling of gold, silver and platinum. Importers and exporters of the precious metals will also qualify as members.
The exchange now has 108 members from 26 provinces across the country.
(Xinhua News Agency October 14, 2002)
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