China gold reserves

At the end of January 2020, China's official gold reserves (as reported to the IMF) stood at 62.64 million ounces - just under 1,950 tonnes. Following a couple of years without any reported purchases China has reported two large gold reserve purchases in November and December. This takes China's gold reserves to a current total of 2,010 tonnes (64,621,500 troy ounces), though many believe the true figure is likely to be much higher.

China, like many countries across the globe, uses gold reserves to diversify their national reserves, but it's also part of a plan to reduce their reliance on the US Dollar.

According to World Gold Council figures, China has the sixth-largest national gold reserves. Officially it is led by the US, Germany, Italy, France and Russia. These figures are however only based on data from the People’s Bank of China, and as discussed below, may not be completely accurate.

How much gold does China have?

In addition to the People’s Bank of China, the State Administration of Foreign Exchange (SAFE) and the China Investment Corporation (CIC) are also thought to hold large gold reserves.

Due to state secrecy there is a great deal of confusion about how much gold China actually has. Officially China is believed to have 2,010 tonnes as mentioned above, but it could be much more. China’s reluctance to reveal its true gold reserve numbers demonstrate the importance it places on the metal as a strategic asset.

Many analysts therefore believe China's true gold holdings are actually far greater than official figures. Simon Hunt, a leading commentator on precious metals, and follower of Chinese gold prices, speculates it could even be as high as 30,000 tonnes of gold. If this is true, China could have gold reserves even greater than that of the US (as shown on the chart below).


Much of the speculation surrounding China's gold reserves comes from the countries leading position as a gold producer. In 2020 alone, despite the Covid-19 pandemic and tightening regulation, China produced 368 tonnes of gold across its various mining holdings. There have been similarly high figures in recent years, and quickly makes 2,010 tonnes seem unlikely to be the total kept in reserve after such impressive production.

China buying gold

China has been buying gold for some time, including a period in 2019 with four months in a row of significant growth in gold reserves. This four-month period saw China buy 42.9 tonnes of gold, but this had slowed down during the global pandemic, and China's strict Covid policies. The two purchases at the end of 2022, totalling 62 tonnes combined, could indicate China re-entering the gold reserve market.

In addition to gold reserves, China is also the world's largest owner of foreign exchange. In 2014 it held a total of 3.84 trillion US Dollars in foreign reserves. The composition of China's foreign exchange reserves is not officially revealed, but analysts speculate that over 66% is held in the form of US Dollars. This makes it the world's largest owner of US Treasury securities. The number of Dollars it holds could be part of why China has been buying gold in recent years.

From 1990 to 2010, central banks around the world were generally reducing their holdings in gold. With the end of the financial crisis in 2009, this trend went into reverse. From 2010, central banks led by China and Russia, began to increase their holdings.

China officially became the world’s second-largest economy in 2010. Latest data indicates it then began reducing its foreign exchange reserves, and increasing its gold reserves. By January 2017 its foreign exchange reserves had reduced to the value of 2.998 trillion US Dollars. The State Administration of Foreign Exchange (SAFE) data showed this is a fall of 0.842 trillion US Dollars in three years.

The switch from foreign exchange to gold reduces China's reliance on the US dollar. It also strengthens its own currency - the Yuan Renminbi. Some commentators believe that China's growing gold reserves could be used in a trade war to boost confidence in the Renminbi which can then rival the US Dollar as an international currency.

China could however be increasing its gold reserves simply because gold is a safe haven investment, that has historically held its value in times of crisis. As one of the world’s largest economies, China faces the biggest risk from any economic slowdown. China’s manufacturing-based economy could soon buckle if another financial crisis were to arrive, so physical gold reserves could serve as a good way to limit exposure to risk.

• Official figures show China’s gold reserves to be 64,621,500 troy ounces
• Officially, China has the sixth-largest gold reserves of any nation
• Many commentators speculate that China has far greater gold reserves