Shanghai launches its gold exchange(2)

Aram Shishmanian, CEO of the World Gold Council, said the launch of Shanghai Gold, with increasing numbers of players from all over the world, will help China gain more say over the prices of the precious metal and add vitality to bullion trading.

The SGE said in a release that the FTZ international board now has more than 40 members, including Goldman Sachs, UBS, Australia & New Zealand Banking Group Ltd, HSBC Holdings Plc and Standard Chartered Plc, many of which are also members of LME and COMEX.

To separate onshore and inshore capital in order to stabilize capital flows and manage risk exposures, foreign investors will trade the gold in offshore yuan, while domestic traders will use the onshore yuan, the SGE said.

Renminbi may potentially replace the dollar in pricing commodities, as China is moving from a regional to international market, said Jeremy East, global head of metals trading at Standard Chartered.

Analysts said the success of Shanghai Gold will largely depend on how active the trading will become.

"The garnered liquidity of the new contracts, a gauge for market recognition of prices, and a strong domestic market will add to the advantages of Shanghai Gold," said Jiang Shu, an analyst with Industrial Bank, one of the few banks that are allowed to import gold into China.

TIMELINE

FTZ's FIRST YEAR

Sept 29,2013

Official launch of China (Shanghai) Pilot FTZ

Sept 30

Release of 2013 version of "negative list"

Oct 9

Procedures simplified for FTZ customs declarations

Nov 22

Shanghai International Energy Exchange is inaugurated in the FTZ

Dec 2

PBOC announces guidelines to support the financial sector in the FTZ

Dec 28

Cross-border e-commerce platform starts trial run

Feb 18,2014

Cross-border yuan payments introduced for institutions

March 1

PBOC removes the upper limit of deposit rate for small-amount deposit in foreign currencies

May 22

PBOC releases detailed rules for free trade account system in the FTZ

May 25

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June

Newly registered companies exceed 10,000

July 1

2014 version of the "negative list" is introduced, with restrictions cut by more than 25 percent

July 25

FTZ "basic law" passed by Shanghai legislators

Aug 21

Amazon.com Inc sets up cross-border e-commerce platform and logistics center

Sept 16

Detailed guidelines released to support capital market

Sept 18

Shanghai Gold Exchange launches Gold International Board