On The Adjustment Of The Structure Of Gold Industry And The Establishment Of Gold Market In China

It was on the weak foundation at the beginning of the founding of the new country that our gold industry started. At that time strict control was exercised over gold so that the lawful position of RMB could be safeguarded and that banking and price could be stabilized. After 1957 the system of state monopoly for purchase and marketing of gold was established and gradually strengthened. Under this system the final refined product of gold enterprises must be purchased by the state bank, a part of gold for state reserve, the rest distributed to relevant units by the bank. It was not until 1993 did changes take place in gold industry.Combining the course of development of the gold industry in our country and many years' practice in gold industry, the author of the paper, from the macro perspective, researches into the adjustment of the structure of gold industry and the establishment of gold market, and taking for example the case of China Arts and Crafts(Group) Company, raises relevant tactics for the gold industry in our country, from the micro perspective.This paper is composed of three chapters. The first chapter mainly deals with the analysis of the structure of the gold industry. Gold industry is one of the existing closed industries where guided plans still prevail. It is a state-supported industry where there is more monopoly than competition and where open door policy is not in full swing. As our country is on the verge of being a member of WTO, gold industry is faced with a more urgent need for transformation. The yearly production of well-known gold mines is more than 30 tons, with the maximum of over 200 tons. As a contrast, the production of the largest gold mine in our country is only a few tons. Facing the great pressure of competition from the international markets, the state-owned gold industry must, like textile industry and cal industry, break away from the old structure, reorganize capital and production and redistribute resources. First of all, we must amass all strength to form several limited companies with the capacity of producing over ten tons of gold every year, making them "locomotives" in the development of the whole gold industry, and on this basis, we should form larger group enterprises, making them "united fleet" in international competition. Otherwise we can't dance with the "wolf" but will be eaten up by the "wolf".Since the adoption of the open door policy, there has been a great demand in our country's gold and silver market. Especially in 1990's the amount of gold used for making jewellery has increased by more than eight times, twice as much the amount produced, a situation in which supply cannot meet the needs. Owing to the fact that there is a shortage of the amount of gold allotted by the state, unable to satisfy the needs of the units using gold, and that there is a difference in prices, there is frequently under cover buying and selling of gold and silver.The consumption of gold in our country mainly focuses on jewellery enterprise. In 1980's, the jewellery market in our country was nothing but a single market in which gold jewellery played the most important part. With the increase of the demand in the market, Chinese jewellery market became diversified step by step. In early 90's the gold and jewellery market transformed from sellers' market into buyers' market, stimulating the production of jewellery enterprise to change from extensive style striving for production to intensive style which is more efficient and has more ingredients of technology. With the appearance of many special bases for producing jewellery and many circulation centres, China's jewellery trade has developed to a new height. In 1999, our country became the third largest consumer of gold, consuming 200 tons of gold in jewellery. However, because of the limited supply of gold and immaturity of the jewellery market, our gold jewellery processing industry has still remained in an early undeveloped stage, in which competition is rely fierce, with market competition mainly focused on prices. Mo...