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EDITIONS
 Thursday, 19 December, 2002, 08:28 GMT
Chinese shoppers queue for gold
A shop assistant holds up a gold bar
Market reforms have made Chinese citizens into keen investors
China has allowed its citizens to buy gold bullion for the first time since the Communist Party took power in 1949.

Shoppers queued on Thursday to look at gold bars on sale in department stores in Beijing and the southern city of Nanjing.

Easing restrictions on gold sales is designed to create a new investment outlet for China's huge pile of household savings, worth nearly $1bn.

Analysts think demand for gold in China will rise sharply as a result of opening up sales of the metal to individual investors, and could even double.

Lucky purchase

The gold bars on sale ranged from 10 grams to one and quarter kilos, the official China Daily newspaper reported.

Some were stamped with a design of a sheep, a Chinese astrological animal. The year of the sheep begins at Chinese New Year in February 2003, making the sheep a particularly auspicious sign.

Gold demand in the country will soon double

Beijing Gold Economics Research Centre analyst

Gold for sale by retailers is being distributed by two firms, Zhongjin Gold Co, the country's foremost gold processor, and Zhaojin Gold and Silver Refinery, China Daily said.

However, the gold price is set by the Shanghai Gold Exchange (SGE), created when China ended the state monopoly on pricing gold two months ago.

The price of gold in the shops "cannot be as sensitive as SGE's and the store will not change price too frequently," said Wang Chunli, manager of Caishikou Department Store in Beijing, which is selling gold bars.

Bars stamped with sheep patterns "are a little more expensive because of their decoration," said Mr Wang.

Global impact?

"Gold demand in the country will soon double from the current level of around 200 tons a year as result of the opening up of the business," Liu Shan'en of Beijing Gold Economics Research Centre reportedly told China Daily.

All the gold bars available for retail sale are 99.99% pure gold, the paper said. Buyers can sell their gold bars back to the distributors, minus commission.

Other moves to develop the gold market include plans for Chinas big four commercial banks to offer gold-related investment products to individual investors next year.

Fears about the possible impact of a Middle East war on the world economy have pushed up gold prices in recent days.

Global stock market falls earlier in the year also benefitted the gold price.


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24 Oct 02 | Asia-Pacific
02 Feb 02 | Media reports
06 Nov 02 | Business
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