Koos Jansen
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Koos Jansen
Posted on 30 Dec 2013 by

China Accumulates Gold For The “World Dream”

Gold will return to the international monetary system and China will have a great influence in how this will play out. In 2013 China has imported 2000 tons of gold, quickly becoming one of the most powerful voices at the IMF table. In the following translation we can read how Mr. Zu He Liang, director at the Chinese Gold Market Research Center, sees a future for gold.

Translated by Yi Zhang from Dublin California.

Closely Followed Gold Prices reflects the Pursuit of the “World Dream”

By Zu He Liang

May 7, 2013, Beijing – The 2013 World Gold Market Trend Conference. This conference was co-sponsored by the Capitol University of Economics and Trade, The Chinese Gold Market Research Center, Economic-Trade Gold Limited and the CMP Group. The 2013 World Gold Market Report was broadcasted live exclusively through the He-Xun Gold Network. At the conference, Mr. Zu He Liang, Director of the Chinese Gold Market Research Center stated that the fact that the entire world is paying close attention to the price of gold shows that we are all pursuing a “World Dream”. The “World Dream” is nothing but a pursuit for world peace, the healthy and stable development of the world’s economy, and a world which is fair to every country and its citizens. The pursuit for gold reflects mankind’s pursuit for the “World Dream”.

2013 May China gold conference

Gold represents mankind’s yearning and aspiration for stability, and healthy economic development; it is a wonderful wish. You may all know the following: In 1917, the British proposed a gold standard. From the formal establishment of the standard in 1816 to the beginning of the First World War in 1914, there were 59 countries that implemented the gold standard. During the implementation process, every country voluntarily participated in and proactively established this system. During the span of the 100 years in which the gold standard was established, the world economy was quite stable- there was no inflation, and wealth distribution was very fair. Due to the fact that the gold standard is such a great standard, every country who participated benefited a great deal from it. This is the main reason why so many countries voluntarily followed this standard. By proposing such a standard, the UK had not only benefited a great deal from it, but also brought numerous benefits to all of the participating countries. This is why the gold standard had been kept for a very long time.

After the implementation of the gold standard, why was the United States willing to take over the baton and implement the Bretton Woods System? The focus was also to stabilize the economy, and to have other countries peg their currencies to the US dollar. In the course of implementing the Bretton Woods System, the dollar’s dominance was established. The interest of other countries will have to follow that of the US. Therefore, when there are conflicts of interest between US and other countries, such a system cannot last forever. The Bretton Woods System was later disintegrated. The world financial crisis in 2008 is the worst financial crisis in history; why is it the worst? The reason stems from the fact that there is not an objective “thing” to measure national interest with the interests of the world. We haven’t yet found an alternative to gold which can play a better stabilizing role under these circumstances. We have been trying- for example, we found this thing called SDRs, but SDRs have its limitations. It’s impossible for SDRs to play the same stabilizing effect as gold.

During the future development, President Xi proposed the Chinese dream. In the process of chasing a “World Dream” through the pursuit of gold, we aspire to seek peaceful development in the world. In this process, we still haven’t found a stability factor which is inherent in the system. Since gold had played a stable role in the process of human development, we will put focus on it. We think gold will continue to draw much attention from the whole world.


Last year, we organized a seminar on the Chinese gold market; I suggested that we are now in an era of gold investment. In the process of realizing the “World Dream”, prior to the second golden age (standard), there are many opportunities for gold investment. Behind these reflections, we should think more on the strength of gold.

Koos Jansen
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  • rowingboat

    “In 2013 China has imported 2000 tons of gold”

    which assumes 500 tonne purchases by PBOC??

    which is sourced from a Mineweb article quoting Philip Klapwijk saying 50-100t maybe more… and then the author of article blowing it up saying 500t maybe more??

    This is yet more rah rah speculation that is all too common unfortunately. In my opinion it undermines your great work Koos and is unnecessary

    Your own net import data to HK and mainland China, plus direct Shanghai imports (133 tonnes in first 9 months this year??) is much more tangible evidence to derive what PBOC is doing after accounting for SGE deliveries, mine production and recycling.

    By the way, November net imports to mainland China from HK now released (76t)

    • In Gold We Trust

      Correct, I got the 500 tons purchase fro the PBOC solely from the Mineweb article quoting Klapwijk. Was he misquoted in that article? What did Klpawijk say?
      I have little hard information (and nor do any of my sources) on PBOC purchases, but 500 tons this year would be plausible. There is enough evidence the PBOC wants to diversify into gold, and some Chinese economists give us an indication on the targets in time from PBOC gold holdings.
      Needless to say you are completely right; the 500 tons is pure speculation.

      • Bill197511

        If you take into account internal mining, Hong Kong imports and the gold coming into
        Shanghai, you’ve got close to 2000 tons in 2013.

      • rowingboat

        Koos, it seems the Mineweb / Klapwijk statement of PBOC estimates are based on the erroneous assumption that the differences between SGE deliveries and GFMS consumer demand data are PBOC purchases:

        “Klapwijk comes to his conclusion by way of anecdotal evidence, which he says must be used because the Chinese are opaque, at best, about their official gold holdings.

        His analysis points to a discrepancy between the amount of physical gold being supplied to the domestic market from mining (none of which is exported) and imports (primarily from Hong Kong) and the amount of actual investment and jewelry demand in the country.

        In simple terms, the amount of supply exceeds the amount of public demand by a significant amount, and thus the surplus gold in his analysis is being bought by the PBOC.”


        Here is the Reuters article discussing direct 133 tonne imports to Shanghai. This number was calculated by Reuters using Global Trade Information Services (GTIS) data.


        • Salacious Monk

          GFMS NEVER mentioned SGE deliveries. Klapwijk’s analysis was like this: First he added China’s mine supply to China’s gold import from HK. Then he subtracted GFMS’s (so-called ACTUAL) data on China’s jewellery and investment from the total(mine supply+imports from HK) and got a residual. Voila! The residual must be bought by the PBOC, according to Klapwijk. But the question is how GFMS knew the numbers for China’s jewellery and investment? Did the GFMS pull the numbers out of their arseholes? Did those numbers underestimate China’s jewellery or investment?

          • rowingboat

            The point is, and as Koos would readily admit I’m sure, is that there is double counting going on here. Koos made a mistake by sourcing information contradictory to his own analytic assumptions. Klapwijk has it wrong and therefore no, you can’t add 500 tonnes to Koos’s estimate of 1500 tonne net imports. Klapwijik’s estimate is a subset of Koos’s 1500 tonnes, not an extra 500t amount based on Klapwijk’s analysis.

            This is mighty hard to communicate on New Years Eve and after a few beers, so Happy New Years everyone and especially Koos and all of his followers! Keep up the great work Koos, and debate is great so please encourage this on your blog.


          • In Gold We Trust

            Ok, so Klapwijk has no idea. (or, in any case, less than me 😉

            However, my best estimate is:

            2169 (SGE delivery) – 410 (mine) – 250 (low scrap) = 1509 import.

            Add to this jewellery import from HK (50 % of HK jewellery sales are purchased by mainland tourist) and additional gold
            smuggling from HK into the mainland through tunnels and alike:


            So net imports could reach 1600 tons

            Now the question is, does the PBOC buy gold at the SGE? All my CHINESE sources say no (one of many reasons: why would they?). This would mean that on top of the 1600 tons of imports there would be additional PBOC gold import. What would be a safe estimate for PBOC purchases in this extraordinary year? 100, 200, 300, 400, 500 tons? Again, a lot of prominent Chinese economists have expressed their urge to diversify from dollars into gold especially if the price is low. (look at the right side of my site “Reads on China and gold” to all the links that refer to these statements.

            Also bear in mind that all the trade numbers I publish from the UK,
            Switzerland, Hong Kong, etc only include NON-MONETARY gold. If
            monetary gold is shipped to China there is no possibility to track.



    • In Gold We Trust

      SGE Delivery in November was 168 tons. Go figure.

      Btw, I was also told that al lot of gold is being shipped into the mainland that doesn’t move through the SGE.


      So I think the 500 tons is fairly accurate. Although I have no hard evidence..

  • Joshua Roberts

    superb work as always sir *tips hat*

  • Bill197511

    I think I’ll start studying Mandarin.

  • Peter Trzaska

    Classy find. Koos. Well done!

  • http://www.amazon.com/Marco-Pic%C3%B3n/e/B0065F1ZGM Marco Picón

    “Whoever has the gold, makes the rules.” That’s it.

  • Gee Whiz

    Many mines are sending their concentrate to China to be processed for both gold and silver, I wonder if that is part of the imports that China is counting? China does not sell any of their gold outside of their country again I wonder if their production is included in world wide production. We live in an age when the Chinese are exchanging goods for gold without anyone knowing! They lend the US money, the US ends up buying goods from China, China ends up buying gold from the West — therefore the West (predominantly US owes China for the debt and China owns the gold), again they sell none of their gold, and they get concentrate from mines in NA to process. Now the article says, “Closely Followed Gold Prices reflects the Pursuit of the “World Dream” — to which I say, “It’s “not” gold prices that reflects the Pursuit of the “World Dream” — that’s a head fake, “It’s the “gold” that reflects the pursuit of the “World Dream.” Read my lips “own gold.”

  • 24 carat

    ….we are now in an era of gold investment…
    What could be the meaning of * stability standard *, and gold returning to the international monetary system ?
    The past 45 /55 years (sixties-seventies) the international role for gold (if any) was very confusing.
    The entire world had to function on the unstable $-standard. During that period, the ECB/BIS was already planning the Gold-Value-Standard, that inspired China and some other big pro goldfractions (oil). A Gold-Value-Standard OUT of the international $ monetary/financial system. The European central bank gold sales under the Washington Gold Agreement had the purpose to redistribute central bank gold to the East (China). The era of stealth gold investment started in 1993/94.
    In order to redistribute scarce goldmetal amongst the pro gold (Value Standard) factions,…goldmetal had to change hands. Physical gold only flows when its price (goldprice expectations) goes down ! As soon as the paperprice of gold starts rising, physical gold stops changing hands. That’s the main paradoxal problem for all the $-system loyalists, who still are gold’s contra factions. They still want to hold to the general perception of the-dollar-as-good (even better than)-as-gold. The power of the stable $ in the unstable system of floating currencies.
    The pro gold factions want to let the Gold Value float freely (Freegold). A free floating Gold Value Standard as to consolidate one’s wealth.
    That’s why the falsified papergold market has to make room for a physical gold market. Euroland’s ECB cannot achieve this without China; That’s why a lot of European (WAG/CBGA) gold moved physically to China dureng the period of European central bank goldsales. Even a lot of South African goldmine gold moved earlier to China.
    The era of goldmetal investment will probaly end when the PBoC announces officially its total central bank gold-wealth-reserve on its balance sheet.Then the great gold redistribution is accomplished and gold’s value can start to float freely.

  • PatFields

    The rational valuation of both gold and silver together, in order to approximate the values of all other goods-at-market (thus forming an equilibrium matrix-wide), would have to be so high as to render coinage too teeny for handy use. Thus to avoid falling BACK under the MYRIAD evils of banknote instruments, the ‘third leg’ of the ancient metallic monetary scheme must include copper as ‘base’ money.

    This classical standard, evolved over millennia, coincidentally yields the greatest economic Liberty and ‘social mobility’ possible to be spread throughout every level of every society indiscriminately.

    Knowing this Truth, dramatically experienced by the Chinese in 1450 AD … a juncture which existentially challenged China’s continuation as an Asian Empire … I find it curious that the current crop of politicians (and bankers) of that country, nevertheless endorse the mirage of a ‘gold standard’, rather than it’s traditional monetary scheme of gold and copper balanced on the fulcrum of silver, so each metal competitively ‘shepherds’ the others into proper rational alignment.

    This illusory Chinese Dream’ of purportedly desiring any sort of just and equal environment of trading for all the world’s Peoples, is thus plainly betrayed as no more than false collectivist rhetoric aimed at restoration of Feudal Social Order, no differently than the politicians and bankers of the West.adorned in their own Mercantilist costume.

  • Eng Joo Koh

    Bought Gold when it was $366 and now…Sticking to Silver! … Kicks the Gold butts…anytime and anywhere!

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