For the past five months, China’s central bank has been increasing its gold reserves while simultaneously decreasing its holdings of US bonds, SİA informs referring to The Epoch Times.
Industry experts believe that this move is in anticipation of future sanctions that China may face.
According to data recently released by China’s State Administration of Foreign Exchange and reported by financial news outlet Caixin, in the three years between September 2019 and October 2022, China’s gold reserves remained unchanged.
Starting in late 2022, however, China began bulking up its gold reserves. Between November 2022 and March of this year, China accumulated 3.86 million ounces (about 120 tons) of gold.
Moreover, from the end of February to the end of March, the country’s gold reserves increased by 580,000 ounces (18 tons) to reach 66.5 million ounces (2,078 tons).
At the same time, China’s central bank is selling off U.S. bonds.
According to economic data analyst CEIC, Chinese communist authorities reduced their holdings of US Treasuries for the sixth consecutive month, to $859.4 billion by the end of January. It was also the tenth consecutive month that China’s US debt holdings fell below $1 trillion.
Compared to the end of January last year, when the country’s US Treasury’s holding was at $1,054.8 billion, the decrease was nearly 20 percent year on year.
According to experts, the Chinese central bank is actively increasing its gold holdings as it anticipates the possibility of being excluded from the global US dollar payments system.
It is noted that China fears US sanctions that would restrict it from Western financial networks and the dollar.
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