Financial Times | Promote the High-Quality Development and High-Level Opening-Up of the Gold Market in a Coordinated Manner - An Interview with Yu Wenjian, Party Secretary and Chairman of the Shanghai Gold Exchange

The Shanghai Gold Exchange (SGE) occupies a pivotal leading position in China's gold market. It serves as a crucial link connecting the upstream and downstream of the gold industry chain and aggregating various types of investors, playing an indispensable role in the stable operation and innovative development of the gold market. Currently, the global economic structure is undergoing in-depth adjustments, and financial technology is developing rapidly. Against this backdrop, what role does gold play in the market? How is the Shanghai Gold Exchange operating in the market? What has been its performance in serving the real economy? Recently, Yu Wenjian, Party Secretary and Chairman of the Shanghai Gold Exchange, accepted an exclusive interview with a reporter from the *Financial News*.

*Financial News* reporter: As an important financial asset, what are the market functions and roles of gold? What kind of development path has the Shanghai Gold Exchange gone through since its establishment?

Yu Wenjian: Gold is a special commodity with multiple attributes such as currency, finance, and investment. It is also an internationally recognized financial asset and strategic reserve asset with extremely strong liquidity and变现 ability. Establishing a centralized, unified, and well-functioning gold market is of positive significance for ensuring the stability of the national financial market system and achieving effective coordination of financial policies. In October 2002, in response to the requirements of market-oriented reforms in China's gold production, consumption, and circulation systems, the Shanghai Gold Exchange was officially put into operation, becoming an important symbol of the opening up of China's gold market.

Over the years, the Shanghai Gold Exchange has focused on serving national strategies, the real economy, and the performance of central bank functions. It has seized opportunities, overcome difficulties, and forged ahead, promoting China's gold market to achieve leapfrog development from scratch, from small to large, and from weak to strong. In September 2014, the SGE launched the International Board business, becoming an important window for the opening up of China's gold market. In April 2016, it released the world's first RMB-denominated gold benchmark price - "Shanghai Gold", effectively enhancing the pricing influence of China's gold market. In August 2019, it launched the "Gold Road" project, actively implementing all-round docking and strategic cooperation with gold markets in countries and regions participating in the "Belt and Road" initiative. In October 2019, it listed the "Shanghai Silver" centralized pricing contract to provide a silver benchmark price for the entire market. In January 2020, it was recognized as a qualified central counterparty (CCP) by the People's Bank of China, further optimizing the safety and efficiency of financial infrastructure. In December 2023, it completed the first cross-border settlement of digital RMB gold transactions, realizing the first application of cross-border digital RMB payment in the financial factor market. In July 2024, an export supervision warehouse was established at the same location as the original import bonded warehouse of the International Board, further upgrading and optimizing the functions of the designated warehouses of the International Board.

After more than 20 years of development, the Shanghai Gold Exchange has become the hub of China's gold market and an important global trading center for gold, silver, and platinum. It has gradually formed a multi-level, full-functional gold market system with the centralized and unified primary market of the SGE as the core, the orderly competitive secondary market as the main body, and a diversified derivatives market as the support.

*Financial News* reporter: How did the Shanghai Gold Exchange perform in terms of market operation in 2024?

Yu Wenjian: In 2024, under the intertwined influence of multiple factors such as the international economic and financial situation and geopolitics, international gold prices fluctuated significantly after hitting new highs. On the basis of making every effort to ensure the stable operation of the market, the Shanghai Gold Exchange continued to promote the development of various businesses. The trading scale increased steadily, with the total trading volume of the entire market reaching 35.82 trillion yuan, a year-on-year increase of 83.46%. The gold trading volume reached 34.65 trillion yuan, with a trading volume of 62,300 tons, increasing by 86.65% and 49.90% year-on-year respectively. All markets operated smoothly, with bidding, inquiry, and pricing businesses carried out in an orderly manner, with trading volumes of 7.74 trillion yuan, 27.38 trillion yuan, and 695.999 billion yuan respectively. International business continued to expand, with the trading volume of the International Board reaching 4.57 trillion yuan, a year-on-year increase of 81.19%. Among them, the gold trading volume was 4.34 trillion yuan, with a trading volume of 7,827.06 tons, increasing by 87.92% and 49.96% year-on-year respectively.

*Financial News* reporter: What distinctive work has the Shanghai Gold Exchange carried out in serving the real economy? How do these efforts help the development of enterprises in the upstream and downstream of the gold industry chain?

Yu Wenjian: The Shanghai Gold Exchange has always adhered to the original aspiration of finance for the people. Starting from the gold market, it has identified the focus of serving the real economy, continuously improved the functional mechanism for supporting the real economy, made precise efforts, implemented effectively, and continuously improved the quality and efficiency of serving the real economy.

Continuously optimize the market operation mechanism and make every effort to maintain the stable operation of the market. In 2024, in the face of complex situations such as increased volatility in precious metal prices, the Shanghai Gold Exchange strengthened dynamic market monitoring and research, adjusted parameters in a timely manner, actively guided expectations, and effectively prevented the risk of sharp price fluctuations.

Strengthen and expand the "exchange + bank counter" dual-tier market system to better serve the five major tasks of finance. It serves pension finance by actively promoting the pilot project of insurance funds investing in the gold market. By strengthening the linkage with the wealth management counter market and cooperating to promote the research, development, and promotion of counter products and businesses, it better serves individuals, small and medium-sized gold enterprises, and small and medium-sized financial institutions, and does a good job in inclusive finance.

Take multiple measures to benefit real enterprises. It promotes profit-sharing to real enterprises by structurally reducing transaction fees and deferred fees, increasing support for members, boosting market liquidity. It promotes the development of individual industrial and commercial households by providing prominent fee reduction support for members that serve individual industrial and commercial households.

*Financial News* reporter: In promoting the healthy development of the gold market and helping maintain national financial stability, how does the Shanghai Gold Exchange contribute to China's construction of a financial power through its own efforts?

Yu Wenjian: The Shanghai Gold Exchange has always been committed to serving national strategies, performing central bank functions, serving the real economy, and promoting market development. It contributes to China's construction of a financial power through the high-quality development of the gold market.

In terms of market services, the Shanghai Gold Exchange has continuously enriched market participants and expanded the breadth and depth of the market. The total number of members has grown from the initial 108 to 302, fully covering the upstream and downstream ecological chain of the gold market. The cumulative gold trading volume has reached 581,100 tons, with a total trading volume exceeding 200 trillion yuan, and the annual compound growth rate has exceeded 40%.

In terms of market innovation, the Shanghai Gold Exchange, together with the Shanghai Stock Exchange and the Shenzhen Stock Exchange, launched China's first "cross-market, cross-system" gold ETF product. It was the first among domestic financial infrastructure to launch night trading services. It launched the first international financial asset trading platform - the "Gold International Board" in the Shanghai Free Trade Zone. It is the first on-exchange trading market to adopt the FT account in the Shanghai Free Trade Zone and the first financial factor market to realize cross-border digital RMB payment.

In terms of market influence, the Shanghai Gold Exchange released the world's first RMB-denominated gold benchmark price "Shanghai Gold", which has now become the gold benchmark price representing the Chinese market, and has been exported to major international gold markets, with its application scenarios continuously expanding. It launched the "Shanghai Gold" gold ingot standard, which became the first enterprise standard in the financial field to win the "Shanghai Standard" award.

In terms of risk prevention and control, the Shanghai Gold Exchange is the first financial infrastructure to join the payment and settlement system of the People's Bank of China, and also the first specific non-financial institution in China to establish a sound anti-money laundering system, effectively maintaining the order of the gold market and financial security and stability.

*Financial News* reporter: In terms of international development, how does the Shanghai Gold Exchange promote the application of "Shanghai Gold" in the international market and enhance the international discourse power of China's gold market?

Yu Wenjian: The Shanghai Gold Exchange continues to enrich the business model of the International Board, enhance its international influence, actively shape a good pattern for the international development of the gold market, and take a path of international development of the gold market with Chinese characteristics.

To further expand the international competitiveness and influence of "Shanghai Gold", the Shanghai Gold Exchange completed the renewal of the two-way authorization cooperation with the Chicago Mercantile Exchange. In 2024, the trading volume of overseas financial contracts settled based on the "Shanghai Gold" benchmark price increased significantly, with a cumulative trading volume of 398 tons, a year-on-year increase of more than 10 times.

The Shanghai Gold Exchange also actively participates in global gold market governance to enhance the international discourse power of China's gold market. On the one hand, it promotes the sustainable and high-quality development of the gold industry, conducts extensive exchanges with international institutions such as the World Gold Council, the London Bullion Market Association, and Germany's Heraeus Group, and promotes the green and low-carbon development of China's and global gold markets. On the other hand, it strives to promote win-win development of the global gold market. It continues to strengthen connectivity with overseas infrastructure in terms of price authorization, production capacity cooperation, and exchange and collaboration. At present, it has conducted extensive contacts with market institutions in countries participating in the "Belt and Road" initiative and in the Regional Comprehensive Economic Partnership (RCEP) countries. It has signed a memorandum of understanding with United Overseas Bank and other institutions to deepen business cooperation in the ASEAN market, further leveraging China's gold industry advantages and Singapore's market resource advantages to promote win-win development of the precious metal markets in China and ASEAN regions.

*Financial News* reporter: How will the Shanghai Gold Exchange further implement the spirit of the Central Economic Work Conference?

Yu Wenjian: In 2025, the Shanghai Gold Exchange will coordinate the promotion of high-quality development and high-level opening up of the gold market, continue to strengthen the effectiveness of serving the real economy, firmly hold the bottom line of risks, and help build a new pattern for the development of the gold market in Chinese-style modernization.

First, actively help build a financial power and do a good job in the five major tasks of finance. Centering on the goal of building a financial power, focusing on the five major tasks of finance, and focusing on the green transformation and low-carbon development of the gold market, it will focus on promoting the in-depth integration of green finance and the gold industry, helping emerging industries in the silver industry chain, especially photovoltaic silver-using enterprises, solve related pain points and difficulties, and guide important production factors to flow and gather towards new productive forces.

Second, actively help enhance the level of Shanghai as an international financial center and deepen the functions of the financial factor market. Continuously and in-depth study the important instructions of General Secretary Xi Jinping on the construction of Shanghai's "five centers", focus on enhancing the competitiveness and influence of Shanghai as an international financial center, strengthen the overall effect, platform effect, amplification effect, and radiation effect, further expand the application scope of "Shanghai Gold", enrich the use scenarios of offshore RMB, enhance the international recognition of RMB gold pricing, and improve China's discourse power in the international gold market.

Third, actively help serve the real economy and expand the breadth and depth of the market. Strengthen the linkage between the exchange market and the over-the-counter market, and consolidate and expand the "exchange + bank counter" dual-tier market system. In February 2025, the State Financial Supervision and Administration issued the *Notice on Carrying out the Pilot Program of Insurance Funds Investing in Gold Business*. We will take the entry of insurance funds into the market as a breakthrough opportunity, continue to increase market promotion and cultivation, strive for more diversified financial institutions to participate in the gold market, and enhance the market's resource allocation function.

Fourth, actively serve the performance of central bank functions and focus on promoting the construction of the gold market system. Centering on the goal of accelerating the construction of an independent, controllable, safe, and efficient financial infrastructure, it will establish and improve the legal system of the gold market, strengthen the comprehensive risk management system, reasonably guide the expectations of both supply and demand sides of the market, and ensure the stable operation of the market.

Fifth, actively help institutional opening up and enhance international competitiveness and influence. Promote the innovation of products and services on the International Board, and continuously promote the international application of Shanghai prices and standards such as "Shanghai Gold" and "Shanghai Silver". Strive to attract more foreign financial institutions and medium- and long-term funds to participate in China's gold market, and build a global gold asset trading and allocation center denominated in RMB.

(Reporter: Shi Jiatong)