For the past 17 months, China's central bank has been accumulating record levels of gold on foreign exchanges. China, too, is already the world's number one producer of gold.
Experts conclude that China, along with other countries, are increasingly wary of having their foreign exchange reserves at risk of sanction. These would be reasons for China to buy gold, and sell USD.
There may be another objective, however. China is a key member of the BRICS countries, who have declared their intention to move away from the US dollar, and to build a dominant trading bloc by 2050. To do so effectively, BRICS countries would need to settle on a medium of exchange, a reserve currency. China's economy is large enough to allow its currency, the RMB, being used over time as a reserve currency. But Beijing officials are insistent, that they will not allow the RMB to be subject to speculators abroad, or to have large pools of China sovereign debt held in foreign banks and trading centers. Both of these would be features of a yuan-denominated reserve trading system.
In theory, however, China's massive and growing reserves of gold could serve as the basis for a gold-standard trading system.
Resources and links:
US dollar shortage hits frontier economies:
www.newarab.com/news/egypt-se...
www.bloomberg.com/news/articl...
www.centralbanking.com/centra...
www.reuters.com/markets/curre...
What's behind China's gold buying spree?
www.dw.com/en/whats-behind-ch...
Top 10 gold producing countries
files.advisorperspectives.com...
China swap deals with Argentina, Saudi Arabia
www.reuters.com/markets/curre...
markets.businessinsider.com/n...
Argentina devalues peso by 50% as dollar shortage bites
www.cnn.com/2023/12/12/econom...
Axios, Analysis of China's gold purchases, with respect to BRICS
www.axios.com/2024/04/08/gold...
Негізгі бет Ғылым және технология Chinese central bank gold buying is hitting records. Are they building a gold-backed BRICS system?
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