ESTABLISH AN EFFICIENT OPERATIONAL SYSTEM FOR CHINA’S GOLD MARKET

The general concept of the SGE's recent operation is as follows:

Firstly, the SGE persists in taking Deng Xiaoping’ theory and President Jiang Zemin's idea of "Three Representatives" as the focus to guide all its work.

Secondly, the SGE makes implementing the decisions made by the National Financial Conference, the first council meeting of the SGE and its administrative council the basis of its work.

The SGE should firmly implement the spirit of the Central Economic Conference and the National Financial Conference, and strengthen the awareness of finance's kernel status and function in a modern economy. The gold market is an important part of China's financial market and even of the whole market system. All work done by the SGE should be done well in order to make the gold market fulfill its basic function of gold resource allocation.

The SGE should implement the decisions made by the first council meeting and its administrative council. It should spare no effort to find solutions to possible problems after its official operation, thus guaranteeing sound and orderly performance.

Thirdly, the objectives of the SGE after its formal operation are to increase its market share, expand trade varieties and enlarge the range of trade patterns.

The SGE should raise its market share which is a decisive factor for the success of a gold exchange. On the basis of gold spot transaction, the SGE should gradually expand trade varieties to meet different requirements and to fulfill the market's price finding function. After the sound performance of spot transaction, the SGE should create rules and procedures regarding deferred settlement, and strengthen the R&D of gold futures.

Fourthly, the SGE should attach great importance and priority to perfecting the trading system, risk-prevention system, market-service system as well as the delivery and shipping mechanism.

An advanced trading system should be highly digital and capable of steady and reliable performance as well as possess a large capacity for load and delivery. A good risk-prevention system includes an internal long-term risk-prevention mechanism as well as the exchange’ regulated administration of its members. An improved market- service system suggests member-oriented awareness. Besides providing a trading platform and information, the SGE will set up its website to provide accurate and timely information. Meanwhile, it will organize various training, investigation, discussions and seminars on current situations. Confronting the competitive situation after China’ entry into the WTO, the SGE will help its members strengthen their exchanges with foreign gold markets, learn from foreign experience, and improve their competitiveness in the international market. To perfect the delivery and shipping system means to adhere to the aim of "safety, high efficiency and low cost" and to set up a shipping network by various means.

Finally, the SGE should lay a solid foundation for future development through "Five Strengthenings", i.e., to strengthen theoretical innovation; to strengthen the cultivation of market members; to strengthen credit construction on the principle of "openness, fairness and justice"; to strengthen its supervision over market behavior, self-discipline and social supervision; and to strengthen the construction of a team with high-quality talents.

(by Wang Zhe, MBA, General Manager, SGE)