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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: PaulM who wrote (30751)	3/28/1999 11:26:00 AM
From: Alex	Respond to of 116768

3/27/99 - China Expected to Revamp Gold Industry <Picture> BEIJING (March 28) XINHUA - China"s gold mining industry is hoping to become more competitive by slowing its rate of growth and by reforming business practices, reported today"s "Business Weekly". The government has set the 1999 gold output goal at 175 tons, up only 1.5 percent from last year. China has 397 tons of gold in reserve, accounting for less than 3 percent of 145 billion US dollars in total foreign exchange reserves. China"s heavy reliance on gold reserves has been reduced significantly as its capability to earn foreign exchange has increased greatly. "The situation allows gold mining enterprises more time to adjust strategies based on market requirements," said Liu Shan"en, an analyst with the Gold Economic Development Research Center. The price of gold calculated in renminbi has fallen by 15 percent compared to 1993 because of flat international gold price levels and the strong value of renminbi. Therefore,, less profitability makes the present an inauspicious time for gold mining enterprises to raise production. In recent years, about half the gold output was generated by small-scale collectively-owned mines. But outdated equipment, a lack of expertise and backward management constitute a potential threat to long-term growth in the industry. Some new investors may enter the industry since existing production still falls short of demand. Demand in the fourth quarter last year on the Chinese mainland and in Hong Kong and in Taiwan totaled 78.3 tons, 25 percent less than a year earlier. Demand on the mainland was less affected by the Asian crisis. For all of 1998, 191.6 tons of gold were sold, 10 percent less than in 1997. In view of this, Albert Cheng, area manager of Asia Under World Council, said: "The more auspicious Year of the Rabbit should help to boost sales." This, coupled with the festive atmosphere surrounding advent of a new millennium, during which a lot of retailers are already planning big promotions with gold as the perfect symbol for eternity, Cheng projected that gold sales should bounce back to levels seen prior to the Asian Crisis. Enditem 28/03/99 01:23 GMT