China launched its first official gold exchange since 1949 in Shanghai on 28 November 2001. Some 105 domestic firms are allowed to engage in spot trading of gold. The November 28 launch will serve as a test of the system, with the formal launch set for early 2002. The new chairman of the Shanghai Gold Exchange is Mr Shen Xiangrong , who is also Vice-Chairman of the China Gold Association (which was relaunched on 25 November to oversee relations between the gold industry and the authorities). The banks designated for membership of the exchange include the Agricultural Bank of China, Bank of Communications, China

Construction Bank, China Everbright Bank and the Industrial and Commercial Bank of China (ICBC). Exchange membership will be limited to domestic enterprises, mainly China's commercial banks, gold mining organisations and jewellers.

Members will be divided into three main categories: financial members such as the commercial banks; comprehensive members who will be able to trade on their account and act as agents for other enterprises; and individual members who can only trade for themselves.

Trading will be in one kilo 9999 (aimed at Asian investors), three kilo 9995 bars (suitable for New York COMEX delivery), and 12.5 kilo bars (London Bullion Market Association). The Exchange will levy 0.0006% per deal. First day's trading was reported at 4,713 kilos, though in a restricted time frame because of technical difficulties.

ICBC, which will act as one of the clearing banks, will provide nine types of services to the market, including settlement, storage, gold trading and agenting, gold leasing, gold financing, purchasing, gold export and import, and individual gold trading services. The bank's clearing system allows trading funds to be settled within two hours.