China to allow digital gold purchases

SINGAPORE (Reuters)

China has said private investors may buy and sell gold through the
internet, its latest move to boost demand for the precious metal,
according to the industry sources.

From late March, individuals have been able to buy gold for investment
online from the Bank of China and other selected banks which are members
of the Shanghai Gold Exchange, they said. Earlier this year, China cut the
import tax on jewellery to 21.3% from 23.3% in 2004 to help encourage
foreign investors to set up jewellery factories as well as to boost
consumption in one of the world's largest buyers.

“Investors in China can now buy and sell gold through Internet banking
with certain banks which provide the service,” said Albert Cheng, managing
director Far East for the industry-backed World Gold Council.

Through Internet banking, investors can transfer money from their bank
account into a gold saving account, making gold trading more convenient,
said Cheng.

An official at the Shanghai Gold Exchange said China now allowed online
gold transactions. China is gradually liberalising its gold market but a
few restrictions, such as the import tax, remain. Beijing still imposes a
17% value-added tax that local dealers have to pay to import gold
jewellery into China.

But gold is now traded freely at world prices on the exchange, which began
operations in 2002. “Starting March 28, individuals in China can buy and
sell gold through their PC,” said one dealer in Shanghai.