Beijing to consider proposal for boosting mainland's gold market

A proposal from a Hong Kong member of the Chinese People's Political Consultative Conference to develop the mainland's gold market will be brought to the central authorities for discussion next week.

Kennedy Wong Ying-ho submitted a paper to the national advisory body that suggested the central government encourage 'alternative investments'. He said this would also provide opportunities for gold trade practitioners from Hong Kong.

'Under these [crisis] circumstances, precious metals have become a good investment alternative for value storage and risk avoidance,' Mr Wong wrote in his proposal.

He later said gold trading services on the mainland had room to develop. 'Currently one can buy gold from the Bank of China, but it does not provide a gold deposit service or repurchase gold from customers.'

The proposal laid out four measures: lowering the service fees for gold transactions, introducing paper gold in state-owned commercial banks as a convenient form of trade; facilitating banks to repurchase gold; and supporting enterprises that sold products made of gold.

Pointing out that Chinese households tended to save a high proportion of their incomes, Mr Wong estimated that investment of 225 billion yuan (HK$255 billion) a year could be created if each resident diverted 1 per cent of their bank deposits to gold. He and seven other CPPCC members will meet officials from the Ministry of Commerce, the Ministry of Finance and the National Development and Reform Commission.