One Of The Many Ways China Is Changing The Global Gold Market
The Dubai Precious Metals Conference last weekend was attended by precious metals investors from around the world. Interestingly, quite some speakers dedicated their presentation to China and its gold market.
One of those speakers, Albert Cheng, Managing Director at the Far East unit of the World Gold Council, explained how China will be rolling out their “one belt, one road” reforms, with a global reach. Those initiatives will be gradually integrated with the gold market.
In 2013, President Xi Jinping launched the New Silk Road Economic Belt and the 21st Century Maritime Silk Road to deepen reform and further open up China to the rest of the world. One belt, one road, in short “OBOR” is a grand vision of cooperation and development initiatives. It relies on existing bilateral and multilateral mechanisms between China and other bordering countries or the well-established regional cooperation platforms, and borrows the ancient historical symbolism of the “Silk Road”.
“OBOR” has already won the support of nearly 60 countries involved. “OBOR” will develop China’s economic partnerships with countries along the Silk Road to build mutual political trust, economic integration and cultural inclusiveness. The regions it encompasses are breathtaking – Central Asia, Western Asia, the Caucasus, South Asia, East Asia, South-East Asia, Europe, Middle East, Africa and more than 20 Chinese provinces and cities; with a combined population of 4.4 billion and annual economic output of $22 trillion.
The efforts of cooperation will first be devoted to energy resources, transportation grids, electricity systems, communication networks, modern services (including financial services), etc.
China Gold Market the next 10 years: Integrate gold cooperation into OBOR
Mr. Xu Luode, President of Shanghai Gold Exchange and a National People’s Congress (NPC) delegate proposed that to integrate gold market development into the strategic development plan of “OBOR” to the NPC & CPPCC ended in mid-March, 2015.
His proposal suggested that cooperation and development mechanism to involve major gold producers/users along the OBOR. This initiative to be led by People’s Bank of China, Ministry of Foreign Affairs, National Development and Reform Commission, Ministry of Commerce and other related ministries, should be developed by leveraging the Shanghai Gold Exchange as the trading hub, and be integrated into the “OBOR” plan.
Related specialized plans and supportive policies will also be developed to balance the regional developments in China and accelerate the interconnection with countries along the routes.