China not planning to cut gold reserves
Associated Press DataStream - August 08, 1999 08:30
BEIJING (AP) - China's central bank has no intention of reducing its gold reserves, which are needed to keep the economy stable, a state-run newspaper reported Sunday.
World gold prices have dropped 13 percent to their lowest level in 20 years since Switzerland, England and the International Monetary Fund announced plans in recent months to sell thousands of tons of gold reserves over the coming years.
A report in the China Business Weekly newspaper noted that declining prices on world gold markets had hurt China, which is the world's seventh largest gold producer.
But China's roughly 400-ton gold reserves are small compared with the 8,000 tons held by the United States and 3,000 tons held by Germany, Zong Liang, an official at the Bank of China, said, according to the newspaper.
Zong was quoted as saying a certain amount of gold was necessary to "stabilize the national economy and politics."
China plans to produce 175 tons of gold in 1999, up from 172.4 tons in 1998. But production slipped during the first five months of the year by 4.1 percent, the report said.
In reaction to the downward trend on world markets, China's central bank, the People's Bank of China, has cut prices three times since January. The cuts were likely to slash industry profits this year to zero, the report said.
|
