China will fully open its gold market but on a gradual basis to foreign investors, an industrial insider said in Beijing on Wednesday.

Chairman Cheng Fumin of the China Gold Association said the country would double its efforts to facilitate future trade of gold and encourage foreign investors to invest in the gold mining industry. Spot trading is predominant in China now.

Cheng didn't reveal details, saying that authorities are considering relevant measures to tighten market supervision and improve business environment.

China has more than 1,200 gold mines, 739 or 61 percent of them are small mines with a daily ore output of less than 50 tons, and the gold mining industry features low efficiency and high risk, he said.

Cheng said China encourages foreign firms to invest in the sector and local companies would learn from their advanced technologies and management expertise through mergers and acquisitions.

The Chinese government has maintained a tight grip on the production and distribution of gold. Cheng said that breaking state monopoly and allowing enterprises to participate in was the trend.

He said China plans to build large gold output bases, increase gold output capacity and crack down on illegal mining.

China is one of the main gold production and consumption countries in the world. The proved reserves of gold in China hit 4,134 tons in 2005, with an output of 224.05 tons, an increase of 5.5 percent over last year, ranking the fourth in the world.

Source: Xinhua