China has allowed the Shanghai gold exchange to start trading in platinum. The aim is to stop the smuggling of the precious metal. For now, it is not necessary to pay the normal seventeen percent value added tax on platinum. China is the world's biggest market for platinum jewellery. This report from Francis Markus:
China's fashion conscious urban young are developing a growing appetite for the cool white look of platinum jewellery.
The country now accounts for fifty-five percent of the world market and the consumption is increasing fast so it is hardly surprising that there is rampant smuggling of the precious metal which comes mostly from countries like South Africa, Zimbabwe and Russia.
To try to regulate the market, the Chinese authorities have this week allowed Shanghai's gold exchange to start trading in platinum too. As an encouragement, all transactions, for now at least, are free of the normal seventeen percent value added tax.
The move comes at a strategic time for the industry with high demand from couples who plan to get married in the popular wedding month of October, but the platinum producers also have their eye on China's vast market in the longer term for another key, if less romantic, use of the metal in car catalytic converters to cut exhaust emissions.