China has set its first national standard for gold at 99.999 per cent purity, state media Xinhua reported on Friday, citing the National Gold Standardisation Technical Committee.
The national standard, which is in line with requirements for gold bars set by the London Bullion Market Association, is seen by industry observers as another step towards liberalization of the country's booming gold sector, paving the way for the opening up of a physical trading market in future.
"Chinese gold bars are now only recognised by local exchanges but not by the international market," said a physical gold dealer in Singapore. "One of the requirements for recognition by the international market is 99.999 per cent purity. I think this is a necessary step to link up with the rest of the world."
The new standard would improve the sector's technology, "promote the development of the country's gold industry and bring new changes to the market of gold investment and consumption," Sun Zhaoxue, president of the China Gold Association, was quoted as saying in the Xinhua report.
The new standard had already been approved by the government's quality bureau, Xinhua said.
At present, the highest purity level for gold available in China is at 99.99 per cent, while most jewellery has a purity of 99 percent.
Gold demand in China, the world's No.1 producer, has exploded in recent years on the back of robust economic growth, and the country is forecast to soon overtake India as the largest gold consumer.
Appetites among Chinese for gold jewellery and investment producers has accelerated Beijing's opening up of the gold sector to foreign players.
Since August, China has allowed two foreign banks, HSBC Holdings Plc and Australia and New Zealand Banking Group Ltd, access to its gold futures market, boosting liquidity in the market and paving the way for the launch of more investment products.