By Hu Fuqing
year marks the 30th anniversary of the release of panda gold coins.
With the celebrations under way, the attention to panda gold coins will
intensify. I would like to recount the early stories of the 20th century
Chinese panda gold coins which I am aware of, hopefully to bring a
historical perspective for the designers and manufacturers of Chinese
panda gold coins, as well as for collectors.
The release of
Chinese panda gold coins was a monumental moment, but before their
release, what strenuous efforts were made by the government agencies
without publicity? This is exactly what this article is about. Without
the groundbreaking efforts, there would not have been any Chinese panda
When the Great Cultural Revolution
was brought to an end in Mainland China, the plan to mint commemorative
coins ranked among the key technological programs of the Print
Administration of the People's Bank of China (the predecessor of the
current China Banknote Printing and Minting Corporation). The details
1. The designs would focus on significant and
memorable events in China, such as portraits of the previous generation
revolutionists and the historical sites where they engaged in
revolutionary activities as well as their monuments; famous ancient and
modern writers and scientists; and well-known historic buildings.
would be made to research and improve artistic and technical expertise
in the design, engraving and die making of commemorative coins, with the
state of the art in the world as the goal – unique, exquisite, and
graceful. The coins would have denominations on them, and the shape
could be round or multi-sided.
3. In terms of the material, research should be mostly done on coins of 99.9% gold and silver, in singles or sets.
design of the first pattern to be reviewed should have the completion
of the Chairman Mao Memorial Hall as the theme; otherwise there would be
no restrictions. The pattern must have the text "People's Republic of
China" on it.
The leadership and the engineering and technical
staff of the then Shanghai Mint (state owned Factory 614) responded with
enthusiasm to the call from the leaders of the Printing Administration.
The Party Committee decided to trial mint commemorative coins for the
anniversary of Chairman Mao's death, called Product "990", which was to
be completed by September 9, the first anniversary of Chairman Mao's
death. Two teams were organized for this purpose: the first team was led
by engineer Yan Yangsheng, with three assistants (Chen Fuquan, Yan
Zhaolin Jin Huaqing). (Some text missing here- translator) based on the
engraving from Birmingham Mint in England. The team lead was
designer/engraver Luo Xingsha.
The Director of the Printing
Administration at that time, Yang Bingchao, visited the Soviet Union,
and brought back from Saint Petersburg Mint samples of the high relief
Lenin commemorative medal. He called for honing of technical skills, to
mint gift coins with portraits of the great leaders, and to engrave
great Chinese leaders on the coins of RMB.
In order to hone the
skills of engraving on coins, Mr. Zhu Dechun got in touch with Professor
Zheng Ke of the Central Institute of Arts and Crafts, for him to give a
training class on engraving, with the support of the leadership of the
Printing Administration. Professor Zheng gave lectures in person, and
coached trainees in making engravings.
I was lucky to be one of
the formal trainees, thus witnessing the period from the very start to
official trial minting of commemorative coins by the coin minting
industry. Shanghai Mint (state owned Factory 614) sent 6
designers/engravers to this important engraving training class, but the
Shenyang Mint was absent due to some unknown reason. It was a
regrettable decision, because they missed an excellent opportunity to
improve engraving skills. During the training class, the Chairman Mao
Memorial Hall was under intensive construction. The leadership of the
Administration of the Chairman Mao Memorial Hall and those of the
construction companies all wished to mint a number of commemorative
coins for the Chairman Mao Memorial Hall. This idea struck home with
Shanghai Mint's (state owned Factory 614) "990" project. A trial run was
performed with success using Shanghai Mint's production line for
Chairman Mao badges. The commemorative medals included the engravings of
the Chairman Mao Memorial Hall and Chairman Mao seated. On September 9,
1977, which was Chairman Mao's death anniversary, Shanghai Mint's 990
project produced designs on time. After careful engraving and technical
adjustment, patterns were formally submitted to the Printing
Administration on December 20, 1977.
People joked that the 1977
engraving training class was the "Huangpu Military Academy." There is
some truth to it. Many key designers/engravers in the minting industry
"graduated" from this training class.
High Level Decisions
in April 14, 1978, a team from Shanghai Mint went to the Printing
Administration to report on the trial minting of Chinese commemorative
coins. On the morning of April 17, Director Yang Bingchao advised that a
meeting was to be held in the office of Geng Daoming, Vice Governor of
the People's Bank of China. In addition to Vice Governor Geng and
Director Yang, there were Zhu Dechun from the Technology Department of
the Printing Administration, Wu Hanlu, a researcher from a related
department, Director Qian Zhenlin of the Non-Commercial Department of
the Foreign Bureau of the BOC, and Zhao Chengan, Vice Governor of Po
Sang Bank in Hong Kong. Vice Governor Geng made it clear that Chinese
commemorative coins were to be made, to assist in tourism for foreign
visitors in an effort to promote China and to earn foreign exchange.
purpose of the meeting was investigation and research, to fully assess
domestic and international demands, and to study the report to be
submitted to the State Council, based mainly on the briefings of Vice
Governor of Po Sang Bank. Li Xiannian, Vice President of the PRC, also
instructed the Governor of BOC, Li Baohua, to push for commemorative
On the domestic front, the office of Liao Chengzhi in the
Ministry of Foreign Affairs called to ask whether the BOC could provide
Chinese commemorative coins. At that time, a retired Defense Minister
from Luxemburg was visiting China. He happened to be a seasoned coin
collector, and was eager to obtain some Chinese commemorative coins. But
there were no commemorative coins available either as gift or for
purchase. The Ministry of Foreign Affairs called Po Sang Bank in Hong
Kong for commemorative coins, but Po Sang Bank had none either.
Cultural Revolution had drawn to an end by then, and foreign
interactions were picking up. Some patriotic overseas Chinese suggested,
after they learned about this story upon visiting China, that they pay
the cost and supply the gold for China to mint commemorative coins. They
would bear all the costs, and split profits half-half with government
agencies involved. Some foreign friends also made similar proposals,
with design elements such as China's emblem and country name to be
approved by China. They also wanted to bear all the costs and split
sales profits half-half. Wuhan City had exported a batch of old gold
coins. Their melt value would have been RMB80,000, but the sales revenue
reached more than RMB400,000. Shanghai sold some banknotes from the
Qing Dynasty as waste paper, but brought in RMB6,000 instead. All in
all, the collection market was prospering with increasing stability in
the country after the Cultural Revolution.
In view of all the
facts above, Vice Governor of the BOC Geng Daoming made it clear that
China would market its own commemorative coins. First, the design had to
be highly artistic; secondly, the workmanship had to be superb;
thirdly, the decorative accessories had to be beautiful. Vice Governor
Geng also mentioned that three tons of gold would be allocated the next
year (1979), and weight of the commemorative coins would be around 1/2
ounce. They had to be an instant hit.
However, the Chinese
government banned Renminbi from export in the 70s of the last century.
Even if the commemorative coins were made, whether they could be sold
overseas was a big challenge. Despite all these uncertainties, the step
had to be made. So a fool-proof plan was made: commemorative gold and
silver medals would be made first, while commemorative gold and silver
coins were also in preparation. Both series would be submitted to the
State Council. If the medals were allowed to carry denominations, they
would become commemorative coins. The commemorative medals would be
minted to proof standards anyway, using the minting technology of
commemorative coins. Denominations on the coins was another big policy
issue. The BOC instructed departments involved to check the
international market for all the details.
After the meeting
chaired by Vice Governor Geng Daoming, Director Yang Bingchao of the
Printing Administration called another meeting on April 19, 1978, to
study the implementation of the plan. The participants were Qiu Weimin
of the Production Department of the Printing Administration, Zhu Chunde
of the Technology Department, Mr. Tang, engineer of the Construction
Department, and Ye Bolin from Shanghai Mint (state owned Factory 614).
The meeting designated the Department of Production as responsible for
the project, assisted by the Department of Technology. On April 24, Ye
Bolin returned to Shanghai, and reported the decisions of the two
meetings to the factory's Party Committee and the Revolutionary
Committee. The leadership immediately decided to take actions. After his
briefing, several decisions were made at the meeting: re-allocate
workspace, add equipment, reinforce staffing, assign duties, and specify
responsibilities. The purpose was to straighten out the internal
process within Factory 614 for smooth execution. The meeting took
seriously the message from the April 17 meeting called by Vice Governer
Geng, and tentatively decided on Beijing scenery as the theme for the
commemorative medals. In the afternoon of May 30, Factory 614 called a
meeting for design and engraving, followed by 8 more special meetings,
to seek consensus, specify tasks and check the progress and quality of
It is no exaggeration to say that these concrete steps laid a solid foundation for the release of China's panda gold coins.
Background of International Market for Investment Coins
panda gold coins are the only investment gold coins from our country.
Talking about this type of investment BU gold coins, according to the
definition of the global "Industry Directory of BU Gold Coins", BU gold
coins are fiat gold coins specifically for investment in gold. The
standard weight of BU gold coins is calculated in ounces, which is the
universal unit of troy weight. A coin may contain one ounce of pure gold
, or a fraction of one ounce (such as 1/2, 1/4, 1/10 or 1/20). BU gold
coins can be minted in large quantities or without any quantity limit.
The issuer releases them by adding a low premium to the price of the
gold in the coins. The purity and technical specs are guaranteed by the
The first BU coins were minted in South Africa. In
1970, the South African Chamber of Mines officially launched the
Krugerrand gold coins, which took over the gold investment markets in
Europe and the United Sates shortly afterwards. In 1974, more than 3.2
million ounces of the South African Krugerrand gold coins were sold.
Inspired by the sales performance of the South African Krugerrand gold
coins, some developed countries released their own BU gold coins after
1979. This became the most effective means for the issuer country to
earn foreign exchange with gold.
The chronological order of the countries issuing investment gold coins is:
South Africa, which first issued Krugerrand gold coins in 1970;
Canada, which first issued Maple gold coins in 1979;
Mexico, which first issued Liberty gold coins in 1981;
China, which first issued Panda gold coins in 1982;
The United States, which first issued Eagle gold coins in 1986;
Australia, which first issued Kangaroo gold coins in 1987;
Great Britain, which first issued British gold coins in 1987;
Austria, which first issued the Philharmonic gold coins in 1989.
Some other countries followed suit by issuing their own gold coins, such as Lion gold coins from Singapore.
the investment gold coins, China's panda gold coins were among the
forerunners. The Cultural Revolution impacted a whole generation of the
Chinese people, but the Chinese panda gold coins managed to keep up with
Internationally, sales of the 1 ounce BU
gold coin account for 80% of all the BU gold coins in most cases. This
shows the real popularity of the investment coin. In comparison, based
on statistics before Year 2000, the sales of Chinese 1 ounce panda gold
coins only accounted for around 49% of all the types. The reason might
be that the Chinese BU panda gold coins were produced with more than BU
quality and excellent workmanship. Many people had them for collection,
The international sales volume of the Chinese
panda gold coins was relatively low (based on statistics before 2000).
In 1989, the Chinese panda gold coins reached their peak sales of
254,000 ounces. In contrast, in the same historical period (end of the
20th century), the gold production in South Africa (average annual
production) reached 75% of all the gold produced in Western countries.
The South African Krugerrand BU gold coins reached 5 million ounces in
annual sales in 1985. This left the Chinese panda gold coins far behind.
Starting from January 1, 2000, the EU countries waived VAT on
gold investment products through legislation. This served as an
important stimulus to the sales (market sentiment) of BU gold coins in
Design and Minting Technologies of China's Panda Gold Coins
design on the 1982 panda gold coins was classical. Many design drafts
were submitted for the Chinese panda gold coins of that year. Proposals
varied. The observe had the national emblem, the Great Wall and the
Temple of Heaven for consideration, and the designs for the reverse were
more numerous. The design for the obverse was finalized on the Temple
of Heaven. Many years of market reaction proves that the design of the
Temple of Heaven on the obverse of all the Chinese panda gold coins was a
successful pick. There was no objection whatsoever from anyone.
was a specific reason why the first set of panda gold coins had no
denominations. Li Baohua, the son of Martyr Li Dazhao, was the Governor
of the People's Bank of China. He was very cautious about denominations
on panda gold coins. Before the release of the Chinese panda gold coins,
the commemorative gold coins for the 30th anniversary of the People's
Republic of China had been released in 1979 with great success. The
denomination was 400. With this precedent, why no denomination was added
to the first set of panda gold coins? It was a historical mystery. When
patterns were submitted for the first set of panda gold coins, the 1
ounce gold coin had two denominations, 350 Yuan and 400 Yuan, for
selection by the leadership. As panda gold coins were investment coins,
they would be released continuously each year as per international
conventions. In contrast, other gold coins were issued once and for all,
with no residual problems. Just for this reason, Governor Li Baohua was
extremely cautious. After serious studies by the People's Bank of
China, Governor Li Baohua finally decided on the four sizes of 1 ounce,
1/2 ounce, 1/4 ounce and 1/10 ounce for the first set of panda coins in
1982, out of his sense of responsibility for history and for the success
of this investment coin project. These sizes were in line with
international standards, too. He also decided not to add denominations
to the coins. International market reaction would be watched for
decisions on the denominations of the second set of panda gold coins, so
that the configuration of the denominations on panda gold coins would
be set more reasonably and more stably, which would benefit panda gold
coins in the long run. That was why no denominations were added to the
first set of China's panda gold coins in 1982. However, the first set of
panda gold coins from 1982 are internationally regarded as China's fiat
currency, only more valuable, as only the 1982 set enjoyed this special
glory in history.
The emergence of panda gold coins resulted
from the hard work by Shanghai Mint (state owned Factory 614). Although
panda gold coins were BU coins, their minting process was no less than
that of proof coins, thanks to the serious and meticulous work of those
involved. That gave rise to the catch phrase in the industry: BU coins
are more than BU (and proof coins are not proof enough). Proof versions
of panda gold coins were also minted, those with a P in the panda design
on the reverse.
Ways to Promote Sales of China's Panda Gold Coins
with the sales of many BU coins in the world, the annual sales of
Chinese panda gold coins are not great. If we take other factors into
consideration, the disadvantage of the panda gold coins are even more
obvious. Take the Canadian maple gold coin for example： the Chinese
panda gold coins are higher in purity than the maple gold coins. The
design on the reverse of the panda gold coin changes every year (except
for 2002), while the maple gold coin keeps the same design year in and
year out, with the Queen of England on the obverse and the Canadian
maple on the reverse. Only the Year is updated. The minting quality of
panda gold coins is next to proof coins, while maple gold coins are BU
coins in the real sense. But in the end the Canadian maple gold coins
still outsell the Chinese panda gold coins. In 1999, more than 4 million
ounces of the American gold eagle coins were sold, while the Chinese
panda gold coins only reached an annual sales volume of 50,909.05 ounces
(fifty thousand ounces). This "Panda Phenomenon" is thought provoking.
just focus on the design of the panda gold coins. It is a challenge by
itself. So far we have more than 100 designs on panda coins (including
proof panda coins in the past). It is no exaggeration to say that
panda's postures are almost "exhausted". How far the design of panda
gold coins can go remains to be seen. The design of the 2001 panda gold
coins was awesome, which was reused in 2002, in the hope to fixate the
panda design, so that only the Year would be updated annually. But the
attempt fell through, with disapproval from dealers. We can say that
panda gold coins are selling at low margins with high quality. As panda
gold coins have very low premium, not much higher than the gold price,
they are only profitable with large sales volumes. If sales lag, the
profit is terribly low.
The basis of panda gold coins' price is
the cost of gold. As a 17% VAT is added within China, and as the VAT is
either waived internationally or charged at a much lower rate than in
China, the marketing challenge is self-evident.
The time to
market of panda gold coins is relatively long, in contrast to other
international gold coins. The supply is slow, due to the processes of
domestic banks and Customs. This inevitably tie down the capital of the
dealers while exposing them to more financial risks at the same time.
Internationally, dealers of BU gold coins would try their best to move
their stock fast once it is replenished, or to secure buyers before the
supply is delivered, in order to minimize the risk of cash tie-up.
Vaults are set up in New York, Los Angeles and other locations for gold
coin distribution. If the customer agrees to the price and pays for a
purchase, he can directly take the delivery the next day with the
invoice. It is a quick process which can greatly speed up the capital
turnover of the dealer. On the other hand, it takes dealers of panda
gold coins a week or even longer to receive the gold coins after price
negotiation and payment. Sometimes customers cannot wait and turn to
other BU gold coins in stock. Long delivery time is one of the
constraints on the sales of panda gold coins.
there is no control over the price of gold coins that dealers charge.
This is especially true in big shopping centers, where panda gold coins
are sold at exorbitant prices. This disqualifies panda gold coins as
investment coins, and alienates most of the salary-earning investors.
international sales network for panda gold coins is far from strong.
Take the example of the US Mint. The US Mint has tough requirements for
dealers in their distribution network. Dealers applying for sales of the
US BU gold eagle coins must submit some qualification documents, such
as certifications from internationally certified financial firms and
membership in major international commodity exchanges. The dealer's
customers must be qualified to deal in gold in large quantities. The
dealer's net asset should be no less than 5 million dollars, and each
order should be 1,000 ounces at the minimum. These measures help in
guaranteeing the annual sales volume of the US BU gold eagles. Major
dealers of the US Mint include well-known financial institutions such as
A-Mark Precious Metals, ScotiaMocatta Precious Metals, Republic Bank,
MTB Bank, Deutsche Bank, the Sumitomo Corporation in Japan, Hang Seng
Bank in Hong Kong, and Swiss UBS. Viewed against developed countries,
our panda gold coin distribution network is still weak.
bottleneck to the sales of panda gold coins is the buyback channel.
Globally, especially on the US and European markets, BU gold coins are
well received as a gold investment vehicle because the society is
wealthy. Dealers buy back gold coins while selling them, and are happy
to make profits both ways. The buyback channel makes cashing out easy
and convenient, which in turn attracts more investors to BU gold coins.
But in China such buyback channels do not exist. People cannot timely
cash out the BU coins they bought. The "investment coin" does not make
sense as an investment.
These issues are constraints on the
sales and progress of panda gold coins. Of course, as mentioned before,
my article mainly touches on the state of panda gold coins at the end of
the 20th century. Currently the market, the gold price and purchasing
power of the Chinese population have significantly improved. Hopefully
the conditions may have been more favorable.
Historical Contribution of Panda Gold Coins
history of modern Chinese gold and silver coins is embodied in the
growth of panda gold coins. In the past 30 years, panda gold coins
scored many great successes.
Many of the technologies in minting
modern Chinese commemorative gold and silver coins were used on panda
gold coins first, and applied gradually to other coins afterwards. For
example, the unique intaglio engraving technique won remarkable esteem
in history. This technique was in use for 13 years, till the
anti-sandblasting technology was adopted on the 1995 panda gold coins.
Other technologies, such as local gold plating, gold inlay, color
printing, and slanted reeding, were all first tried on panda coins.
panda coins were awarded the Best Gold Coin and Best Silver Coin
multiple times in the American "Coin of the Year" competition. This
award is regarded as the Oscar of numismatics.
gold coins failed to reach the top sales volume in the world, they
brought in huge profits in the past 30 years, contributing significantly
to the finance of the PRC.
Panda is the national treasure of the Chinese nation, and panda gold coins are the backbone of the China Gold Coin Co.
the end of this article, I would like to give my heartfelt thanks to
the individuals and organizations who helped the Chinese panda gold
coins grow along the way. Among them are Luo Xingsha, Chen Jian, Sun
Qiling, Fang Maosen, Ye Bolin, Zhu Dechun, Bian Yaohui, Yan Yangsheng,
Yang Binchao, Geng Daoming, Martin Weiss (USA), Ms. Zhang Jiechang
(USA), Shanghai Mint (state owned Factory 614) and Panda America.
author of the article is member of China Arts and Crafts Association,
and member of the review committee of Coin of the Year)