China Nonferrous Metals News: Gold Production and Finance Combination Forum 2017 Successfully Held

Updated on: November 26, 2017

Reported by Shi Aiping

Features: Co-hosted by Shanghai Futures Exchange (“SHFE”) and Beijing Gold Economic Development Research Center, the “Gold Production and Finance Combination Forum 2017” was held successfully in Shanghai on November 24. Jiang Yan, Secretary of the Party Committee and Chairman of Board of Directors of SHFE, and Wang Xiaomei, Deputy Secretary of the Party Committee and Chairwoman of Labor Union of China Gold Group attended the Forum and delivered a speech.

Co-hosted by Shanghai Futures Exchange (“SHFE”) and Beijing Gold Economic Development Research Center, the “Gold Production and Finance Combination Forum 2017” was held successfully in Shanghai on November 24. Jiang Yan, Secretary of the Party Committee and Chairman of Board of Directors of SHFE, and Wang Xiaomei, Deputy Secretary of the Party Committee and Chairwoman of Labor Union of China Gold Group attended the Forum and delivered a speech.

In his speech, Jiang Yan said that since its official launch in 2008, the gold futures product has, as a significant part of gold market and a strategic product of SHFE, gradually brought into play the functioning of price discovery and hedging, as a result of overall steady market operation, significant growth in trading volume, smooth and orderly physical delivery, enhanced correlations between futures price and relevant spot markets and continuous optimization of investor structure. At present, the gold futures product has already become a generally accepted important instrument for upstream and downstream enterprises of the gold industry to manage their price risk and stabilize production and operation, playing a positive role in the resource allocation of the gold industry.

In the next step, Jiang Yan stressed that in the wake of the complicated and changeable economic and financial situations both home and abroad as well as the needs of the gold industry for transformation and upgrading, SHFE will adhere to its reform and development orientation of marketization, legalization and internationalization, and effectively carry out the frontline regulatory duties so as to play the pivotal role as an exchange. In accordance with the basic thought of “planning for the future with world view, establishing rules with international standards, and highlighting characteristics with local advantages”, we shall well conduct four articles of “standard searching, standard alignment, standard reaching, and standard seizing”, give full play to the political, resource and regional advantages of the Exchange, push forward the product, operational, regulatory and technological innovation and expand the width and depth of serving the physical economy through the futures market in a bid to build the gold futures market into the global gold risk management and pricing center, and SHFE into a standardized, effecient, transparent, comprehensive and globalized first-class exchange around the world.

In her speech, Wang Xiaomei said that the gold industry has embraced the era of finance when China’s gold enterprises stepped into a transforming and upgrading period, which means the entire gold industrial chain cannot develop without the support of the finance, including exploration, production, processing and circulation. As a matter of fact, with a natural nature of finance currency, the gold is a favorable vehicle for the combination of production and finance. Thanks to the effective conditions and means brought about by the worldwide gold market system and relatively perfect derivatives, the development space and prospect of the gold production and finance combination will be very promising.

Wang Xiaomei pointed out that the central leading body of the Party has already set the keynote of “building up a modern economic system based on the combination of production and finance by facilitating the finance to serve the physical economy”. This overall guidance is of significance to the combination of gold production and finance for the new era. First of all, we shall make the physical industrial economic stronger and better by setting the orientation of serving the development of physical gold industry; secondly, we shall focus on the exploiting of the finance currency nature of gold and tackle the problem of mismatched needs between the production and finance with bold innovations; and finally, we shall earnestly take the controllable risk as the prerequisite so as to ensure the high-quality development of the gold production and finance combination.

During the session of the Forum, Zhang Yongtao, Vice Chairman and Secretary General of China Gold Association, also shared his views and elaborated on the status quo and trends of the combination of gold production and finance in China. Nearly 10 guest speakers from multiple enterprises and research institutes delivered keynote speeches, including China Minmetals Corp., China National Gold Group, SD-Gold Financial Capital Management Corp., SHFE, Beijing Economy Development Research Center, Green Dahua Futures, UOB China and Zhaojin Futures. More than 170 representatives from the gold industrial chain enterprises, financial and research institutes in China also gathered together under the same roof, and deeply analyzed and summarized the lessons, challenges and opportunities of the gold production and finance combination, in a bid to tap the market potentials and set a clear orientation.

The theme of this Forum is to focus on the status quo of the combination of gold production and finance and propel its development with high quality and depth. This closely conforms to the philosophy of serving the physical economy and bringing into play the functioning of hedging and price discovery, which is always upheld by the futures market. The Forum exchanged a wide range of opinions and views including not only the macro strategic thinking and the current situations review, but also summary of experience and innovative thoughts, all of which can be said to be comprehensive and profound. In the meanwhile, two sessions of round table discussions hosted by the Forum were also brilliant, during which industrial experts, enterprises leaders and financial elites conducted the discussions centering on the two major hot topics in the market, i.e. what is and how to conduct the combination of gold production and finance.