China to increase gold reserves to 10,000 tons
2009-12-01 06:05:00 Jim Sinclair
The following article provides an unusually forceful and specific confirmation of what contributors here have been saying regarding China’s plans to diversify its foreign exchange reserves by acquiring gold and other hard assets.
An official is quoted as saying China means to increase its gold reserves (last quoted at about 1054 tons) to 6000 tons in the next 3-5 years and perhaps 10,000 tons in the next 8-10 years.
It also provides an unusually blunt statement regarding China’s low opinion of the U.S. dollar and other Western currencies. A professor at the central bank’s graduate school is quoted as saying, "Strictly speaking, almost half of our country’s foreign exchange reserve is not stable in value and is of high risk."
Dubai crisis gives China chance to buy oil, gold: report
Reuters, Monday, November 30, 2009
Relevant excerpts:
Dubai’s debt crisis could be China’s opportunity to snap up gold and oil assets, a senior Chinese official said in remarks published on Monday. . While the impact of the Dubai crisis on the global economy and on China was not known yet, it would last a while at the very least, Ji Xiaonan, who chairs the supervisory board for big state-owned companies under the State Council’s state assets commission, told the Economic Information Daily.
"That could give China a buying opportunity to put some forex reserves into gold or oil reserves," Ji was quoted as saying by the paper, which is widely read by Chinese officials.
China's $2.27 trillion in foreign exchange reserves are mostly parked in U.S. treasuries, despite calls from some in China to invest the reserves in oil and other natural resources that the fast-growing Chinese economy will need in future.
While the impact of the Dubai crisis on the global economy and on China was not known yet, it would last a while at the very least, Ji Xiaonan, who chairs the supervisory board for big state-owned companies under the State Council's state assets commission, told the Economic Information Daily.
"That could give China a buying opportunity to put some forex reserves into gold or oil reserves," Ji was quoted as saying by the paper, which is widely read by Chinese officials.
Another paper, the China Youth Daily, quoted Ji as saying that a team of experts from Beijing and Shanghai had set up a task force last year to look at the issue of gold reserves.
"We suggested that China's gold reserves should reach 6,000 tons in the next 3-5 years and perhaps 10,000 tons in 8-10 years," the paper quoted him as saying.
That is in line with many officials' view that China should decrease the proportion of its $2 trillion foreign exchange reserves held in dollar-linked investments and raise its gold holdings to diversify its portfolio.
Courtesy: www.jsmineset.com
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