China's gold reserves rank 6th worldwide

16:40, December 16, 2010      

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The latest rankings of gold reserves show that, as of mid-December, the United States remains the top country and Chinese mainland is ranked sixth with 1,054 tons of reserves, the World Gold Council announced recently.

Russia climbed to eighth place because its gold reserves increased by 167.5 tons since December 2009. The top ten in 2010 remains the same compared to the rankings of the same period of last year. And Saudi Arab squeezed to the top 20.

Developing countries and regions, including Saudi Arab and South Africa, have become the main force driving the gold reserve increase. Among the top 100, 67 of them come from developing countries or regions, compared to 62 last year.

The International Monetary Fund (IMF) and the European central bank are the major gold sellers, and the IMF's gold reserves decreased by 158.6 tons.

Notably, France and the Netherlands did not sell any gold in the past year, and the developing countries also decreased their gold purchase compared to 2009.

In spite of the Chinese mainland's huge foreign exchange reserves, its gold reserve accounts for only 1.7 percent of total reserves, which means China's gold reserves are the lowest among the top 20 in terms of proportion.

The share in developed countries is very high. For example, gold reserves account for 74 percent of the foreign exchange reserves in the United States and 70 percent in Germany. Experts believe it reflects the different foreign exchange management system between developed countries and developing countries.

Many officials, including officials from the State Administration of Foreign Exchange, have said the Chinese mainland could not substantially increase the proportion of gold reserves and thus the international gold price will be unlikely affected by the "China factor."

If China had increased the share of its gold reserves, the world gold market would have likely re-staged the trend seen at the end of 2009, when India increased its gold reserve, and the gold price might have further increased by 15 percent on the current base and reached 1,600 U.S. dollars per ounce.

By Liang Jun, People's Daily Online
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