Thomas Fuller once said that it is much better to have your gold in the hand than in the heart. It seems Chinese Government has taken inspiration from this quote. Chinese rulers are heavily into piling up their gold stock to back their currency Yuan. China has come long since it had opened doors for foreign investment. Now China wants that their currency to be in leading currencies in the world. After overtaking Japan as second largest economy in the world now ambitious Chinese have set their eyes on U.S. dollar, the current strongest currency in the world. China has taken major steps to promote the Yuan as a trade and investment currency. Converting rigid Yuan in open currency is part of their ploy to overtake world markets by their currency. China’s new gold related investment is mirror of their Yuan policy. China is a largest producer of gold. China is on mission to expand the wings by internationalizing its gold market. Communist Politburo has allowed to more foreign bullion, more import and export and bigger transactions in Chinese market.
Not so old story when Chinese Yuan was not considered a good equalizer in trade. But then People’s bank of China entered in the picture to take control of situation. Their ambition is to in be the same line of Euro and Dollar. People’s Bank of China is currently owned 1,054.1 tonnes of gold compared to European Central Banks (all 17 countries) 10,401.3 tonnes and U.S. Federal Reserve’s 8,133.5 tonnes. It’s evident from the numbers that China is too far behind than other major world players.
China is taking every measure to ensure that they will not lag behind any more. In order to attain this goal China has stopped all gold bullion export from the country. China has sent a strong signal to other nations. No more golf from China will goes to the outside world. The net production of 350 tonnes gold will goes in the people’s Bank of China vault directly now. Its good news for the people who are in daily gold stock picking.
China’s bid to be in the same league of dollar and euro is not easy one. Iron curtains around China are one major problem. Chinese systems and government policies are not up to the mark if compare to other major nations. Absence of free media and non existent freedom of expression is worsening the Chinese bid to attempt supremacy.
Chinese doesn’t believe in depending only one measure to attain their goal. They have not only stopped the export the gold measure only but also they are hell bent on buying gold in international market. Of the overall approx. 3000 tonnes of gold bullion supplied to the world in 2011, it is estimated that China is on the look out for most of the gold, to back their Currency. In 2009, China bought four tonnes of gold bullion from Hong Kong. In 2011, China imported 46 tonnes of gold bullion from the other exporters of gold. China has always have many tricks in their sleeves to surprise the rest of the world for sure.
China’s geo political ambitions in Asia –Pacific region are not the best kept secret. Strengthening the Yuan is very important in order to attain their aim. That why China is very serious on this front. According to reputed gold investment newsletters, China’s holy mission to get more and more gold is good news for the investor world wide that are willing to buy gold stocks.
China’s move to buy more and more gold will increase rates of gold stocks in the global market. It’s good opportunity for gold investors to earn some profit. Now they know if they want to sell gold stocks where they have to look out.