LAWRIE WILLIAMS: China adds 10 tonnes to gold reserves, but is that all?

Latest figures from the People's Bank of China, the country’s central bank, claim that the nation increased its gold reserves again in February by a somewhat conservative 320,000 troy ounces (9.95 tonnes).  It is only recently that the Asian Dragon has started re-reporting monthly gold reserve increases - but are these an any more accurate guide to the true size of the nation’s gold reserves than past announcements?  After all China has a pretty dismal record in reporting the size of its gold reserve leading many to believe, ourselves included, that the size of its gold reserves as reported to the IMF is more fiction than fact.

If we add the latest 9.95 tonne figure to its previously reported gold reserve this now stands at some1,862 tonnes, the world’s sixth largest holding, but only equivalent in value to around 2.4% of the country’s total forex holding value.  By contrast, all of the top four nations, and also the Netherlands at No.9 hold more than 60% of their forex holdings in gold.

However the Chinese central bank is not thought to be the only official government entity which holds gold on its behalf.  These probably include the State Agency for Foreign Exchange, China Investment Corporation (the nation’s sovereign wealth fund) and the military, and we can probably add the commercial banks to this list as they are all state-owned.

Given that China has hidden its gold purchases in the past behind all kinds of screens and tended to release reports of substantial gold reserve increases only at five or six year intervals - which it explains as having moved its gold from an account it feels it does not need to report to one that it does, its real reserve figure is far from transparent.  There have been utterances from Chinese politicians and academics over the years suggesting that they assume that gold will play an increasingly important role in a global reserve currency reset at some time in the future and the country needs to increase its gold reserves.  Thus there is speculation that China may be building its gold reserve to match the USA’s 8,000 tonnes plus level.  Some even reckon that its real holding may already be in excess of Germany’s 3,369.7 tonnes, but the truth is that no-one outside of China knows and those within China who do have been hugely successful in maintaining secrecy.  Some day we will learn the true figure - but probably not yet!

Meanwhile the official levels held by the world’s top 10 nations - as reported to the IMF - are noted below.  But even these figures may be suspect as there is no necessity to have the figures audited so we have to rely on official government data which we all know is sometimes more than economical with the truth!  Why should China be the only nation thought to be ‘cooking the gold reserve books’?


Top 10 World gold holders (tonnes) as reported to the IMF

















Mainland China














09 Mar 2019

About the author

Lawrence Williams

Lawrence (Lawrie) Williams is a well known London-based writer and commentator on financial and political subjects, but specialising in precious metals news and commentary. He is a qualified and experienced mining engineer having graduated in mining engineering from The Royal School of Mines, a constituent college of Imperial College, London - recently described as the World’s No. 2 University (after MIT).

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