De-dollarization: China’s Gold Reserves Steadily Rising for Seven Months

Just in May, Beijing bought 16 tons of gold. Analysts: Beijing is doing this to reduce its dependence on the dollar.

In 2023, the financial authorities of Beijing also implemented their policy aimed at increasing the country’s gold reserves at an accelerated pace. According to the latest data from the People’s Bank of China – this is the name for China’s Central Bank empowered to manage the monetary policy – in May 2023, China bought 16 tons of gold, so its gold reserves have increased by as much as 144 tons since December last year.

According to analysts of the World Gold Council, “From January 2020 to January 2023, China’s gold reserves grew from 1948.31 tons to 2069.36 tons, respectively.” In the first quarter of 2023, China was the second largest buyer of gold after Singapore.

According to international analysts, in this way “Beijing is trying to reduce the dependence of the country’s financial system on the dollar.” This was confirmed by market insider experts, according to whom “in parallel with purchasing tens of tons of gold, Beijing has kept reducing the share of the dollar in the structure of its gold and forex reserves.”

On May 8, Chinese State Administration of the Foreign Exchange (SAFE) reported that due to the increase of the gold quota, the total value of China’s gold and forex reserves in May reached 3.205 billion dollars compared to 3.184 billion in the previous month. According to SAFE, at the end of April, the share of gold in reserves was 66,760,000 ounces, while in March this figure was 66.5 million ounces.

After the start of the conflict in Ukraine, Russia stopped publishing data on its gold reserves. Nonetheless, the analysis shows that the central banks of China and Russia now jointly hold two-thirds of the 6,000 tons of gold accumulated in the treasuries of major developing countries.

Beijing’s policy is increasingly based on the concepts of multipolarity, diversification, and de-dollarization. In China, the most modern and advanced technologies of the 21st century are developing by leaps and bounds. In this context, once again, the sanctions policy of the United States and some Western countries against China has produced diametrically opposite results. “The West, whose dream was to lock China in a cage of scientific isolation, cannot help but see Beijing becoming the world’s center of innovation discoveries in the most advanced sectors,” said the spokesman of Zhongguancun Forum (ZGC Forum) that took place in Beijing in May 25-30.

Zhongguancun is the science and technology center of Beijing, also called China’s Silicon Valley. The innovation industry in the Chinese capital is experiencing explosive development. Suffice to say that last year a new technology company appeared in Beijing every five minutes. Beijing ranks third in the world in innovative start-ups with a market value of more than one billion dollars.

This year, the ZGC Forum gathered delegations and representatives from more than 80 countries around the world. Microsoft founder Bill Gates spoke to the Forum participants, urging them to think about the prospects for a better future for humanity. “Can we mobilize ingenuity, knowledge, and experience to solve problems and eliminate poverty, in which billions of people now live? So instead, they could move on to a healthy and productive life? I think that we can finally answer this question in the affirmative,” said Bill Gates.

It suffices to mention some topics of the ZGC Forum-2023 to understand what it is about: artificial intelligence, quantum science, computer-human brain interface. In his welcoming address to the Forum participants, Chinese President Xi Jinping reminded that “by 2025, Beijing should become the world innovation capital.” The authorities of the valley have created a special economic and customs zone “Zhongguancun” that offers tax and customs rates at the “zero” level for resident companies. In recent years, more than 300 transnational groups and world’s largest companies have become residents of the Innovation Development Zone in Beijing.

Finally, we can say that China is using every opportunity to gain positions in international markets and successfully utilizes to its benefit the West’s sanctions policy against Russia. In 2022-2023, after Western companies and their allies, including South Korea, left Russia, Chinese manufacturers filled all the niches that had opened up. While in May 2023 Russian imports of cars from South Korea amounted to 0.9%, from Japan 0.5%, from the USA and Europe 1.9%, the Chinese presence in Russia’s imported cars market increased to 75% of the total.