During the last months of 2016, China officially proved that it had 12,100 tonnes of gold reserves and according to statistics by unofficial sources China has acquired more than 30,000 tonnes of gold in reserves during the last 35 years. Beijing’s long-term strategy is obviously well in place in China trying to improve the mainland and bring economic prosperity to the Chinese people while strengthening state powers and extending foreign influence. China joined the World Trade Organization (WTO) in December 2001 only months after 911. Back then the Chinese middle class was essentially non-existent, only amounting to 5% of the population. Fast forward to today and the middle class in China is now around 35%.
Beijing’s well-thought-out strategy clearly paid off for them, while American politicians controlled by domestic American special interest groups essentially offshored much of the U.S. industry, a process which began by design decades earlier.
In 2016, 70,000 tonnes of gold were traded in China on spot exchanges, futures exchanges and over-the-counter at banks, and that amount was expected to exceed 100,000 tonnes by 2020 according to the vice chairman of the China Gold Association (CGA).
According to the official documents and data submitted in 2015 to the IMF by the Chinese government, the nation’s official holding was only 1,054.6 tonnes, during the next 3 years this officially reported amount has increased to 1,857 tonnes, while an analyst who goes by the name of Simon Hunt alleges that it is much more than that.
“China has much more gold than it is allowing the world to see. As Alasdair Macleod, probably the world’s number one analyst of the gold market wrote that between 1983 and 2002 China probably accumulated 25,000 tons of gold. Thus, its current gold holdings are probably north of 30,000 tons in contrast to the USA which has either sold or leased most of its gold.”
Hunt notes the followings:
- China will take strong action in the second half of this year to restructure its financial system, its heavy industry, manufacturing and real estate sectors. It will be what we call a period of ‘’controlled crisis’’ that will not only shock most foreigners but will have global reverberations.
- China does not want its currency to be the global reserve currency but to be an accepted unit for the settlement of trade and for central banks and others to retain in their portfolios.
- China does not trust Washington’s ability to manage the sole reserve currency unit in the interests of the rest of the world, only in its own interests. Historically, America has used the inflation route to reduce its debts to the rest of the world. In contrast, China is likely to link the Yuan to gold within three years. Before then government must have its economy seen to have been restructured and stable even though the process will be painful.
Unsurprisingly this fits with the information the Chinese leader, Xi Jinping has put out over the years in his book (summary), of course, this material could have been written as an advertisement for China and its international partners, and it remains to be seen how much of this will be implemented in