BEIJING, Sept 30 China's central bank is
planning to increase the number of firms allowed to import and
export gold and will also ease restrictions on individual buyers
of the precious metal, according to a draft policy document
issued on Monday.
The proposed policy change could boost imports by China,
which is expected to overtake India this year as the world's top
gold consumer, and where gold normally trades at a premium to
London spot prices.
"If it comes into effect, supply into China could increase
and (local) prices could ease depending on demand," said a Hong
Kong-based precious metals trader, who declined to be named.
The People's Bank of China said on its website
(www.pbc.gov.cn) that the new rules would allow bank members of
the Shanghai Gold Exchange, as well as gold producers with an
annual output of more than 10 tonnes, to apply for import and
Trade is currently restricted to just nine banks, while the
exchange has 25 bank/financial institution members.
The central bank did not say when the new rules would take
effect. In a statement accompanying the policy document, it said
the draft rules were designed to "standardize and promote the
development of the gold and gold product import and export
business and protect the legal rights of practitioners."
All transactions will need to be registered with the
exchange, and license holders have a responsibility to ensure
that domestic supply and demand remain balanced, the draft
The central bank would continue to maintain control on
overall gold export volumes "in accordance with the requirements
of state macroeconomic policy adjustments," it said.
"It is part of the new tide of financial deregulation," said
Jiang Shu, a gold analyst with Industrial Bank in Shanghai. "In
the long term, this is a natural process of relaxing gold import
A shortage of gold in China earlier this year when a steep
fall in international prices sparked a surge in demand could
have been a factor in easing the rules, he said.
In mid-April, spot gold posted its biggest two-day
drop in 30 years, prompting a rush for gold jewellery, bars and
coins in China and across the world.
Premiums paid for gold on the Shanghai Gold Exchange jumped
to more than $30 an ounce over London spot prices, traders said.
Demand has since steadied and premiums have eased to around
$7 an ounce.
Under the draft policy, individuals will also be allowed to
bring up to 200 grams (seven ounces) of gold into China from
overseas without having to report to customs or pay tax.
Chinese investors have traditionally looked to gold as a
safe investment, while gold jewellery is popular for festivities
such as weddings.
Members of the public have been invited to comment on the
new policy and any objections need to be submitted before Oct.
29, the bank said.
China does not publish gold trade data, but according to
figures released by the World Gold Association, the country's
imports via Hong Kong reached a new record of 834.5 tonnes in
2012, up 94 percent on the year.
(Reporting by David Stanway in Beijing and A. Ananthalakshmi in
Singapore; Editing by Richard Pullin)