While I’m still researching all the other ways of how the Chinese may be smuggling gold from Hong Kong into the mainland, I came across an interesting video from CCTV in which is exposed how smugglers dig tunnels underneath Honk Kong borders in order to transport “goods” to places where there is demand for “goods”.
There are a little more than 7 million people living in Hong Kong, though this special administrative region of the People’s Republic Of China has net imported 510 tons of gold year to date.
I think everybody who has just one IQ point more than Ben Bernanke can figure out that the Hong Kong population can never “consume” this immense amount of gold by itself. The main reason for these mass net imports is because Hong Kong is used to store gold for bullion dealers from all over the world. Another reason is that half of all jewelry sold in Hong Kong is bought by mainland tourist that bring it home undeclared simply by wearing the jewelry on their bodies.
But now it seems there are other ways to bring gold to where gold is in demand. If we look at the video we can see a tunnel of 80 cm high and 100 cm wide. Not particularly big enough for cars and boats to pass through, but excellent for small valuable goods like gold (and drugs). So maybe, just maybe, a small part of the 510 tons was exported to the mainland through tunnels like these by people that were not so fortunate to have a PBOC gold trading license.
In Gold We Trust