China curbs gold imports as trade war heats up
BEIJING: China has severely restricted imports of gold since May, bullion industry sources with direct knowledge of the matter told Reuters, in a ...
The world's second largest economy has cut shipments by some 300-500 tonnes compared with last year - worth US$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.
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.
"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.
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.
It has also restricted gold import quotas before - most recently in 2016 after the yuan weakened sharply, bullion bankers said.
The yuan has sunk more than 10 per cent against the dollar since early last year and the central bank this month allowed it to slide below the key threshold of seven-per-dollar for the first time in more than a decade.
But restricting gold imports is an easy way to curtail outflows without affecting people's lives, bullion bankers said.
Slowing global economic growth is pushing more institutional investors, particularly in Europe and North America, toward gold, traditionally seen as a safe place to invest, while central banks are buying at the fastest pace in half a century.Read more: CNA
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