China curbs gold imports as trade war heats up
BEIJING, Aug 14: China has severely restricted imports of gold since May, bullion industry sources with direct knowledge of the matter told Reuters, in a move that could be aimed at curbing outflows of dollars and bolstering its yuan currency as economic growth slows.
The world's second largest economy has cut shipments by some 300-500 tonnes compared with last year - worth $15-25 billion at current prices, the sources said, speaking on condition of anonymity because they are not authorized to speak to the media.
The restrictions come as an escalating trade confrontation with the United States has dragged China's pace of growth to the slowest in nearly three decades and pressured the yuan to its lowest since 2008.
China is the world's biggest importer of gold, sucking in around 1,500 tonnes of metal worth some $60 billion last year, according to its customs data - equivalent to one-third of the world's total supply.
Chinese demand for gold jewelry, investment bars and coins has trebled in the last two decades as the country has rapidly become wealthier. China's official gold reserves meanwhile rose fivefold to nearly 2,000 tonnes, according to official data.
Chinese customs figures show it imported 575 tonnes of gold in the first half of the year, down from 883 tonnes in the same period of 2018.
In May, China imported 71 tonnes, down from 157 tonnes in May 2018. In June, the last month for which data is available, the decline was even sharper, with 57 tonnes shipped compared with 199 tonnes in June last year.
The bulk of China's imports - from places such as Switzerland, Australia and South Africa and usually paid for in dollars - are conducted by a group of local and international banks given monthly import quotas by the Chinese central bank.
But quotas have been curtailed or not granted at all for several months, seven sources in the bullion industry in London, Hong Kong, Singapore and China said.
"There are virtually no import quotas now issued in China," one source said. In June and July "next to nothing" was imported by banks, they said.
The Chinese central bank did not respond to a written request for comment.
Imports have not fallen to zero because some banks may still be receiving some quotas and other import channels, such as refineries receiving semi-pure mined gold, remain open, four of the sources said. -Reuters