More than half of China's gold production is state-owned; only the China National Gold Group Corporation accounts for 20%. And China keeps the gold it mines; domestic mining production is not allowed to be exported. And don't forget that China is already the world's largest gold producer, China doesn't export gold in significant quantities. Therefore, even if it were true that recorded imports are falling, it would not necessarily mean that Chinese demand has fallen or that China has stopped accumulating gold.
For the reasons I will explain, a tighter market outside of China may cause the price of gold to rise faster than many expect. This line of thinking assumes that China's leaders have a set goal of how much gold they want to accumulate, which may or may not be the case. But could China and its allies be about to surprise the world by backing their digital currency with physical gold? Most leading analysts point out that the slowdown in China's economic growth is one of the main reasons why the price of gold has not left its trading range. The World Gold Council estimates that China's middle class is expected to grow by 200 million people to 500 million in six years.
Both Russia and China have known that they must de-dollarize for a considerable time, which is why both have been increasing their gold reserves so steadily. Several analysts (and gold fans) expected China to announce an update to its gold reserves in April. Due to the above-mentioned events and its Eastern mentality with regard to gold, a few years after the Great Financial Crisis (GFC), China became an important player in the global gold market. If China decides to turn money into a weapon, as the United States has done, all it has to do is declare its gold reserves, perhaps even partially backing the yuan.
An intriguing pattern of price movements in global gold markets has paved the way for China to accumulate a huge amount of this precious metal, according to veteran analyst and trader Francis Hunt. One report states, for example, that demand for gold in China has fallen because the yuan has fallen and has made metal more expensive in the country. China's central bank (which oversees the SGE) and other government departments have been encouraging physical ownership of gold. In May, China contacted foreign ingot banks and gold producers to participate in a global gold exchange in Shanghai, because, as one analyst put it: “The world's leading metal producer and importer seeks to have a greater influence on prices.