Three recommendations for the Chinese gold industry over the course of the next three to five years
On July 25th, the 3rd China International Gold Conference, co-sponsored by the China Gold Association and the World Gold Council, was held in Beijing. At the event, the Development Research Center of the State Council and the World Gold Council jointly issued the "Recommendations for the further development of China's gold market report" (“the report”).
The report provides a comprehensive analysis of the challenges facing China’s gold investment and trading market coupled with recommendations on how to overcome them. Together, these recommendations should make China’s gold market stronger.
To prepare China’s investment and trading market for greater global integration and the internationalisation of the renminbi, the report offers three broad recommendations:
- Raise standards across the supply chain by adopting a more robust regulatory and standard-setting framework. This would protect China’s gold investors while at the same time driving environmental best practice amongst the domestic gold mining industry. Delivering more effective regulation and monitoring will also enhance stakeholders’ trust in the Chinese gold market.
- Open investment in gold to institutional investors – such as insurance companies and pension funds who are currently subject to regulatory restrictions – to increase liquidity and enable these large investors to further diversify their portfolios and benefit from investing in gold.
- Strengthen China’s gold market infrastructure by understanding the needs and wants of a new wave of domestic institutional investors. China’s market infrastructure providers have an opportunity to tailor products and services to support the internationalisation of the renminbi by properly understanding the needs of banks, miners and refiners in Belt and Road Initiative countries.
Since the late 1990s, China’s gold market has gone through a remarkable period of innovation and development. During this time, the World Gold Council has played an active part in the growth of China’s gold industry, having worked in close cooperation with the State Development Council to create a set of policy recommendations that proved effective in facilitating growth for the gold industry in China.
According to Daofu Chen, Vice Director-General of the Finance Research Institute of the Development Research Center of the State Council, “China today is the world’s largest consumer and producer of gold. This cannot be separated from the effort of China government and industry leaders over the past 20 years. During this time, the Development Research Center of the State Council has worked closely with the World Gold Council on pushing specific marketing policies for the China gold market to create the conditions necessary for China’s gold market to flourish.
“As the renminbi plays an increasingly significant role in the global financial system, China’s financial markets will become more accessible to overseas investors. China is set to assume a greater leadership role in the world through its projects like the Belt-Road Initiative. The Development Research Center of the State Council will continue to cooperate with the institutions which focus on the development of China’s gold market, like the World Gold Council.”
Aram Shishmanian, Chief Executive Officer of the World Gold Council, stated that “While China’s financial markets are opening up and the renminbi is gaining traction, China’s gold industry is still at a crossroads. Industry insiders are working to ensure the future development of the Chinese gold market, and that is why we have jointly issued this report with the Development Research Center of the State Council, so that we can promote the steady development of China's gold market in the next three to five years. We see the massive potential that China has in playing a stronger leadership role in the world gold market, and over time, this will lead to increasing demand both domestically and internationally.”
As the market development organisation for the gold industry, the World Gold Council works to stimulate and sustain demand for gold, provide industry leadership, and be the global authority on the gold market. Over the past 20 years, together with The Development Research Center of the State Council, the World Gold Council has supported the opening-up and reform of China’s gold market which promoted the rapid growth of the gold industry.
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Note to editors:
Development Research Center of the State Council
The Development Research Center of the State Council is a policy research and advisory body directly under the State Council of China. The main function is to study the overall, strategic, forward-looking, long-term and hot and difficult issues in China's national economy, social development and reform and opening up, carry out independent evaluation and objective interpretation of major policies, and provide policies for the Party Central Committee and the State Council. Suggestions and advice.
The Development Research Center of the State Council maintains and develops extensive contacts and close cooperation with government departments, research institutions and the business community, and actively carries out exchanges and cooperation with important international organizations and national think tanks for government and social services with high-level research results and advice.
World Gold Council
The World Gold Council is the market development organisation for the gold industry. Our purpose is to stimulate and sustain demand for gold, provide industry leadership and be the global authority on the gold market. We act when others do not, when changes essential and when the outcomes are at scale and sustainable. We work to develop understanding and protect and enhance trust and transparency in the market. We help shape pro-gold policies to create a fair and effective market, ensuring universal access to gold and a vibrant and growing gold market of ever greater relevance. Based in the UK, with operations in India, China, Singapore and the US, the World Gold Council is an association whose members comprise the world’s leading gold mining companies.