News / Economy

Sources: China Grants Gold Import Licenses to Foreign Banks for 1st Time

FILE - Customers buy gold accessories at a gold store in Taiyuan, Shanxi province.
FILE - Customers buy gold accessories at a gold store in Taiyuan, Shanxi province.
TEXT SIZE - +
Reuters
— China has granted licenses to import gold to two foreign banks for the first time, sources said, as moves to open the world's biggest physical bullion market gather pace.
 
Allowing more banks to import gold could increase the supply of the metal into the country, easing local prices, which are higher than in most Asian nations.
 
China's gold imports more than doubled last year to over 1,000 tons - ousting India as the biggest buyer - as demand soared to unprecedented levels due to the first drop in international prices in 12 years.
 
ANZ and HSBC were awarded import licenses late last year, according to two sources with direct knowledge of the matter.
 
Other trading sources said China Everbright Bank has also received approval to join the nine local banks already allowed to ship gold into China. Beijing strictly controls how much the banks import through a quota system.
 
“China is actually increasing its transparency. I think there will possibly be further access to other banks as well,” said Cameron Alexander, manager of Asian precious metals demand at metals consultancy GFMS, which is owned by Thomson Reuters.
 
China faced a supply crunch early in 2013 when a sharp plunge in gold prices released pent up demand that eroded inventories at banks and jewelry sellers.
 
Premiums in China tend to be higher as supply is tighter than other parts of Asia due to the quota system and the limited number of import licenses.
 
Premiums are currently about $15 an ounce over London prices, compared to less than $2 in Singapore and Hong Kong. Premiums rose to a record high of $30 in April-May last year.
 
China imported 1,060 tons of gold from Hong Kong in the first 11 months of 2013. Beijing does not release gold trade data, so numbers from Hong Kong - the main conduit for gold - provide the best estimate on imports.
 
However, traders warned that the award of the new licenses did not necessarily mean imports would jump sharply from 2013's record volumes, as the level of demand would be the main factor driving shipments. They also pointed out that the move indicated appetite for gold would likely be strong.
 
In 2011, ANZ and HSBC became the first two foreign banks to get the green light to trade gold futures on the Shanghai Futures Exchange.
 
ANZ is the only foreign bank on the list of 10 most-active members by volume on the Shanghai Gold Exchange (SGE), the physical trading platform in China.
 
String of changes
 
The granting of new licenses is the latest in a string of steps by China to ease restrictions on bullion trading and boost market accessibility.
 
China approved its first gold-backed exchange-traded funds last year and extended trading hours on the futures exchange.
 
The central bank issued a draft policy document in September that proposed letting more banks import and export gold.
 
The move also comes as the SGE plans to launch gold futures in the city's pilot free trade zone this year. Those futures would be open to foreign investors.
 
“China will need to allow more foreign players into the physical gold market if it's planning to have foreign investors participate on its gold futures,” said one of the sources.
 
“This is the first step that the regulators are taking to ensure that its gold futures contract in the free-trade zone can take off.”

You May Like

Abuja Blast Impacts Lives, Livelihoods

Officials say they are looking at ways to help bombing victims and boosting security More

Cambodia Technology Adviser Criticizes Cybercrime Draft Law

Phu Leewood says current criminal code can be used to prosecute offenders and that there is no need for a separate law More

Photogallery A Year Later, Boston Remembers Deadly Marathon Bombings

City pauses to honor victims and salute emergency workers who came to their assistance in frantic moments after blasts More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid

World Currencies

EUR
USD
0.7287
JPY
USD
103.22
GBP
USD
0.6027
CAD
USD
1.0991
INR
USD
60.191

Rates may not be current.