The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) had permitted Shanghai Gold Exchange to open spot transactions of precious platinum, but "we are still waiting for a final approval from the State Council," said Yin Bo, a senior publicity official with Shanghai Gold Exchange.

Some of the detailed policies, especially those concerning taxes, are yet to be finalized, said Yin.

Most of the country's platinum is imported and the MOFTEC, the country's top foreign trade authority, is still negotiating with relevant government bodies to decide whether or not to impose taxes on platinum imports via the exchange.

"We still need months of preparation before formally opening the transactions," said Yin.

So far, SGE is conducting trading on gold with purity at 99.99 percent and 99.95 percent.

Experts and insiders say the move is aimed at setting the platinum price on the domestic market in line with that on the international market and to meet the nation's huge demands for the precious metal.

Official statistics show that currently, the international price for platinum is US$683 per ounce, or 182 yuan (US$21.93) per gram. While, the domestic price stands at 193 yuan (US$23.25) per gram.

Lu Wenyuan, secretary-general with the China Gold Association, told China Daily that the price gap increased the operating costs of Chinese platinum processors and left a margin for the speculators.

According to statistics from the China Gold Association, China's platinum consumption has ranked No 1 around the world for three consecutive years.

China imported 40 tons of raw platinum last year, which accounts for 55 percent of the world's output as a whole.

Conversely, the annual platinum output in China was only 1 ton.

Meanwhile, the consumption of platinum, involving jewellery, decorations and industrial usage, reached US$2 billion, a figure which is expected to further increase in the coming years.

"The majority of the platinum was for jewellery brought about by the rapid economic development in China and the Chinese consumers enthusiasm for such products," said Lu.

To date, 108 institutions and enterprises from 26 Chinese provinces, municipalities and autonomous regions licensed to trade in the raw gold market, have registered as members of SGE.

(China Daily March 20, 2003)