China appears to be heading towards its highest gold import level since 2018 this year, with the country importing over 1,343 tons in 2022. This marks an impressive 64% increase compared to last year's figures, a testament to the real purchasing power of Chinese consumers as the nation stands poised as the world's biggest gold consumer.
It appears that much of this flurry of purchasing activity happened during the latter half of 2022, as government organizations on both a federal and provincial level relaxed some COVID restrictions which allowed citizens to more autonomously access the markets. December alone saw a staggering 157 tons imported into China and only further highlights how eager consumers were for gold investments during 2021.
China Is The World’s Biggest Gold Buyer
January's gold withdrawals from the Shanghai Gold Exchange totaled 140 tons, a modest 2-ton month-on-month drop that was 25% lower than the withdrawal total in January 2022. Although these numbers indicate a slight downward trend, the 2023 Chinese New Year holiday played a key factor in this decrease given that it limited the number of trading days in January to just 16 - the fewest since 2012.
Despite this difference, however, it appears that investors are still fairly confident in their gold investments, as shown by data indicating that withdrawals were still 12% higher than the 10-year average when analyzing previous Chinese New Year months. This is likely due to a combination of better economic conditions, alongside continued uncertainty and volatility in other investments.
The Chinese central bank accumulated 1,448 tons of gold between 2002 and 2019, and then suddenly went silent. Many speculate that the Chinese continued to add gold to its holdings off the books during those silent years.
Speculation about Chinese gold holdings has been rampant for years, but particularly since 2015 when Jim Rickards took to the Mises Daily with his estimation that China holds several thousand tons of gold in their State Administration for Foreign Exchange (SAFE) beneath the official reported figures.
With its economy expanding by leaps and bounds, and international trade relationships built on trust being more important than ever before, it’s no surprise that people are interested in just how much gold China is really hoarding. How much of the world’s economic future does China’s vast gold supply give them control over? One can only hypothesize, and continue to speculate until a verifiable answer is provided.
The truth may remain hidden in the shadows of SAFE, but until we have greater transparency, one thing is certain: questions will remain unanswered.
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