According to the MIIT statement, domestic demand is set to surpass 1,000 tons by the end of 2015. This vastly improves the fundamentals for gold as a long term investment and silver for some extra upside potential. Keep in mind, these are the government reported numbers that only reveal what they have declared. There have been numerous reports of gold smuggling into China that would never be found on the books so use these figures as base levels. The ultimate impact of increasing their gold demand 500 tons per year could be enormous. India's demand has recently been curbed by government actions to slow down the physical acquisition by introducing new paper backed ETFs, but that doesn't stop under the table transactions. [youtube]http://www.youtube.com/watch?v=f3jSNkYdA4o[/youtube] The IMF World Gold Council recently came out with a report showing how in November, China imported 90.8 tones of gold. That was double the 47 tonnes the imported the previous month in October bringing their annual import amount to over 800 tones, double what they imported in 2011. To put this in perspective, the 800 tones of gold imported in 2012 will exceed all of the official holdings of China. Also, during 2012 the Chinese bought $39 billion of gold while they bought under $10 billion of worthless U.S. Treasuries. Source: http://wp.me/p2hryu-r6
is that data govt bought gold or privately bought? is it bought through an exchange or from the mines? isnt spot price based on gold sold at the exchange for immediate delivery or to cover a short position? and if that data was physical, would it reflect in the spot or would there be some lag?
The article adresses imports into China which is all the physical yellow metal. As of what the spot price is based on, it's a variety of factors including many confounding variables as well. I'm not too sure I understand what you mean by lag.
as in, since spot price is determined at exchanges, would imports into china effect the spot price? what if say, for example, it was all bought from perth mint, that wouldnt effect the spot price would it? lag i meant as it no effect in the short term - once news breaks then ppl think oh gold is where its at then they start buying up
Every trade has an influence on the spot price, ranging from incredibly minute to big enough to change the dynamics of the whole global market. If the Chinese government were to buy lots of gold and make a big song and dance about how much they were buying, that would likely change people's perceptions of gold and might well push the price up since people know there is a very large, very keen buyer out there. The Chinese government obviously doesn't like everyone knowing what it's doing so it tries to obfusticate it's transactions. Nobody really knows how much the government is buying or where they're getting it from. They're not picking up the phone and saying "Hello? Chinese government here. We'd like to buy a tonne of gold please". They use intermediaries instead. One of the only ways we can even start to guess how much gold China is buying is by looking at gold shipments entering Hong Kong which are officially recorded. Nobody really knows where the gold goes after that, but a lot of it ends up going to mainland China. The other thing to remember is that the Chinese government and the Chinese people are two separate buying entities. The Chinese government knows it doesn't have to own all the gold itself because so long as the Chinese people own a decent amount, China as a whole will have a lot of gold. Funnily enough, the Chinese government officially encourages it's citizens to buy gold. Outsourcing the job of buying gold to the people means the government can get China (as a whole) to accumulate more in secret without starting a massive run on the metal and pushing the price up.
America is supposedly capitalist but they haven't let anyone audit their gold holdings in decades. China is communist or capitalist depending on whatever suits them at the time.
China is no more communist, than the USA is capitalist. These are just labels which don't mean anything.
Both as corporatitationists if such a term exists. Only differene bring American govt is owned and operated by the international corporations where Chinese corporations are owned and operated by Chinese govt. **Whoevers reading this from either spy agency I'm on the Chinese side, I think it's a far more economical model long term.
If China is communist how come it doesn't have even a fraction of the rules, regulations, fines and crushing controls as Australia? Chinese call Australia the "slave state" and can't understand how we live under such intense rules and law enforcement.
Communist states rule by fear. They use fear and secret police to help keep the populous in line. At least in democracies you get to vote. You might say all the candidates are the same, but there's nothing stopping you from running in an election as a candidate. Or alternately people can just gripe about the wrongs of the system rather than put their hand up.
Nothing stopping you from joining the communist party and working your way up in China. You have to go through their weird rituals and initiations and back-scratching just like you've got all the weird rituals and initiations and back-scratching to get into the Labour/Liberal parties. Very similar to the way the mafia operates when you think about it. One group gets Tony Soprano while the other gets to choose between Tony Soprano and the leader of the other main faction. Comical. And the fear thing? War On Terror? Climate Change? And dozens of smaller scale fears that I could think up if I put my mind to it.
I see thousands if not millions trying to leave communist China, I dont see the same trying to move there from democracies.
Give it time... more and more people are starting the move towards China. The number of Americans living in China has reached a historic high of 110,000. They are teachers, hairdressers, diplomats, travelers, students and business fat cats. (2005) http://usatoday30.usatoday.com/news/world/2005-11-17-china-guide_x.htm China registered 27.1 million entries of foreigners last year, compared with only 740,000 in 1980, according to official data. About 600,000 foreigners currently live in the country on a regular basis, 30 times more than in 1980. (2012) http://english.people.com.cn/90782/7950595.html
According to the Chinese Communists Party itself, they no longer practice Marxism, Leninism, or Maoism. The official nomenclature is 'Socialism with Chinese Characteristics'. Here's the English translation of a "People's Daily" article from 1984. That phrase has been quietly lampooned, and parodied for almost three decades now.
Of the 600,000 foreigners living in China, I doubt any or many would consider themselves Chinese or Chinese citizens. 99% I reckon will remain citizens of the country from which they came and would plan on returning home sometime in the future. That's very different to migration where those migrating intend to live permanently and take up citizenship of the country they are entering. I seriously doubt any passport holder of a democratic country will migrate to China, give up their passport to take Chinese nationality. I dont see many practicing Christians or falung dafa members looking to migrate to China anytime soon!
Whatever they call themselves, its a typical Communist Dictatorship complete with 5 year plans, a politburo and a Workers' Party as the supreme (and only) political party.
