Wednesday
May 29, 2024

China’s Gold Rush: Strong Global Implications

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By: GSDN

Gold bars: source Internet

One of the biggest fallouts of the ongoing Russia-Ukraine War is that globally there is a rethink of heavy dependence on the dollar, which is the globally accepted trading currency. The sanctions on Russia have had the desired effect and China whose ambitions to annex Taiwan is an open secret now is closely and carefully monitoring the economic condition of Russia so as to derive lessons from it.

On November 09, 2022 the Chinese President Xi Jinping during his visit to the Joint Operations Command Centre of China’s Central Military Commission (CMC) said the Chinese Army known as the People’s Liberation Army (PLA) has to prepare for war and fight to win it. This was Xi’s first address to his two million strong military which is also the largest in the world, after being elected China’s President for a record breaking third time.

As the next Chinese Communist Party (CCP) meeting in 2027 approaches nearer, there will be immense pressure on Xi Jinping to prove his worthiness of getting elected for the fourth time in a row. With the Chinese economy in doldrums and the Covid-19 lockdowns still happening in China due to its mishandling of the pandemic, Xi will look for a military option to wean away the attention of the Chinese citizens from the economy and lockdown issues.

Taiwan being a highly emotive issue for the Chinese, will be the best big bet Xi can put on for his smooth passage as China’s President for the fourth time. Though, an attack on Taiwan in the near future is not ruled out but Xi will be handicapped in taking this option as USA has stood like a protective shield over Taiwan.

So, the next option for Xi is to attack the eastern Ladakh area of India which saw bloody clashes between the PLA and the Indian Army in June 2020.

Either way, a military option is the only recourse for Xi Jinping for his way to power once again in 2027.

China fully understands that whether Taiwan or India are attacked, USA and the West will immediately levy sanctions on it as has been done on Russia, hence it has started purchasing gold in droves.

According to the report for the period July-September 2022 released by the World Gold Council, 399.3 tonnes of gold were purchased in this quarter, which is a steep jump from 186 tonnes purchased in the previous quarter and 87.7 tonnes purchased in the first quarter of 2022.

The gold purchased in just nine months of 2022 is the highest gold purchased any year since 1967.

Out of the 399.3 tonnes purchased in July-September 2022, the central banks of Turkey, Uzbekistan and India have purchased 31.2 tonnes, 26.1 tonnes and 17.7 tonnes respectively which totals to 75 tonnes. With nearly 325 tonnes of gold being purchased by unidentified buyers, the fingers are yet again pointing at China who has not reported any gold buying activity since September 2019.

The People’s Bank of China has reportedly purchased over 2000 tonnes of gold from the Central Bank of Russian Federation.

Earlier, from 2009 to 2015 China did not report any gold purchasing activity and then stunned the world in 2015 by disclosing that it has about 600 tonnes of gold. China is building up its gold reserves to take on the economic onslaught that will be leashed by USA and the West whenever it attacks Taiwan or India in future.

These are clear warning signs that the global geopolitical situation is going to get more precarious in the times ahead and the ongoing Russia-Ukraine War is not the last major geopolitical turbulence that the world is witnessing.

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