Call for gold to lift yuan's global status
By Zhang Fengming |
December 4, 2010, Saturday
|
Print Edition
Print Edition
CHINA should consider boosting its gold reserves as a long-term strategy to pave the way for the internationalization of the yuan and also needs to revise management of its foreign reserves, central bank adviser Xia Bin wrote in a report yesterday.
China is the world's largest producer and second-biggest consumer of the precious metal and holds a world-record US$2.65 trillion in foreign reserves.
"Holding gold as the basis of solvency has been used throughout history to support the rise of a strong global currency," Xia said. "Having a corresponding amount of solvency is a necessary precondition and indispensable safeguard in the long-term strategy for the yuan's internationalization."
China has increased gold reserves by 454 tons to 1,054 tons since 2003, the State Administration of Foreign Exchange said in April. But gold only accounts for 1.6 percent of China's foreign reserves, the World Gold Council said.
China has set up a gold exchange, allows individual to trade bullions and encourages banks to offer gold investment products as it steadily opens its gold market.
China's imports of gold rose nearly fivefold to 209 tons in the first 10 months of this year from 45 tons for all of last year, Shen Xiangrong, chairman of the Shanghai Gold Exchange, said on Thursday.
Gold prices hit a record US$1,403 an ounce in November.
China also needs to set up a commission which will invest its foreign reserves overseas in areas such as oil, resources, equipment and technology, according to Xia.
China is the world's largest producer and second-biggest consumer of the precious metal and holds a world-record US$2.65 trillion in foreign reserves.
"Holding gold as the basis of solvency has been used throughout history to support the rise of a strong global currency," Xia said. "Having a corresponding amount of solvency is a necessary precondition and indispensable safeguard in the long-term strategy for the yuan's internationalization."
China has increased gold reserves by 454 tons to 1,054 tons since 2003, the State Administration of Foreign Exchange said in April. But gold only accounts for 1.6 percent of China's foreign reserves, the World Gold Council said.
China has set up a gold exchange, allows individual to trade bullions and encourages banks to offer gold investment products as it steadily opens its gold market.
China's imports of gold rose nearly fivefold to 209 tons in the first 10 months of this year from 45 tons for all of last year, Shen Xiangrong, chairman of the Shanghai Gold Exchange, said on Thursday.
Gold prices hit a record US$1,403 an ounce in November.
China also needs to set up a commission which will invest its foreign reserves overseas in areas such as oil, resources, equipment and technology, according to Xia.
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