The gold reserves of all countries across the globe have an imperative say when it comes to a monetary crunch. Next time the monetary system across the globe is in a stress of sorts, something which isn’t far away, we will have to find out where all the gold is, who owns the reserves and how they deal with the crunch. Thus, to add to the knowledge base of interested readers, we will have a look at China’s gold reserves today.
Many think of gold as an antiquated asset that doesn’t hold much value in the digital world of today, but China surely doesn’t. The country has been stacking up gold reserves ever since the global crisis of 2008 and has made quite a reserve.
China isn’t the only country increasing gold reserves, as Central Banks across the world are realizing the importance of the reserve. Central banks today have a little over 34,000 tonnes of gold with them. This value is roughly 20 percent of the 175,000 tonnes of gold available on the ground.
The United States is the largest owner of the precious metal as of yet, with a reserve of 8,133 tonne. Divide this value to the number of citizens in the country, and you would see that there is an ounce of gold per person.
What China Holds
The People’s Bank of China or PBOC is the Central bank for the country and announces gold reserves once in every 5 years. The figure that is revealed to the public currently is 1,842 tonnes. The staggering amount makes China rank at 7th in the global list of countries with most gold reserves.
Efforts for accumulation went up after the global depression of 2008, after which China sped up mining. China is currently the largest miner of gold across the globe. The country currently mines over 430 tonnes, which is almost 50 percent more than what was mined by Australia, the second largest miner of gold for the globe. This means that 15 percent of the gold mined in the world originates from China.
China, interestingly, doesn’t export any of the gold that it mines. It keeps all of it and additionally imports gold from Hong Kong, London, Singapore and Switzerland as well. It was during 2010, some 8 years ago, that China took over India as the largest importer of gold in the world.
While we don’t have official figures of the total imports of gold in China, we can get an idea by studying the Shanghai Stock Exchange. All gold that enters the borders of China is to be traded via the SGE. By studying figures from the exchange we can tell that around 14,111 tonnes of gold was imported by the country from 2008 onwards.
The imports and the production of the country now put a question mark over the figures released by the PBOC. One analyst mentioned, “The PBOC’s figures can be whatever they want them to be. In all probability, it’s much higher than officially stated. My guess is that they gave that figure of 1,842 tonnes to be high enough to get credibility with the IMF to satisfy its criteria to be included in SDRs (the IMF’s international currency basket), but not so high as to issue any kind of challenge to the US.”
Analysts have also estimated that if all things were to be factored in, the total gold reserves would be over the 4,000 tonne mark. This makes China the second biggest owner of gold reserves in the world after United States.
China is believed to play an important role in setting gold rates in 2019, and with such holdings it surely can take center stage.