Gold producers must "meet challenges" and "move towards the direction of adapting to the market-oriented economy", the China Gold daily quoted Wang Dexue, head of the State Gold Bureau, as saying. China's centrally planned gold industry had "become more and more incompatible with the need of development," the newspaper quoted him as saying. Most state gold producers would be restructured into share-holding companies with the state holding a majority stake, he was quoted as saying. Some firms would be allowed to raise capital on the capital markets, he said without giving further details. China would foster the emergence of several big gold conglomerates, he said.

Earlier this month, the World Gold Council (WGC) urged China to deregulate its tightly-controlled gold market gradually, first freeing up the domestic market and thenopening up internationally. At present, the central People's Bank of China is the sole intermediary between gold producers and buyers. Wang was quoted as saying the bureau was studying the plan to establish a national gold market.