China eases restrictions on gold imports
China has partially lifted restrictions on imports of gold, bullion industry sources said, loosening curbs that had stopped an estimated 300-500 tonnes of the metal worth $15-25 billion at current prices from entering the country since May.
China’s central bank had for several months curtailed or not granted import quotas to commercial banks responsible for most of the gold that enters the country, Reuters reported last week.
Sources said those measures had possibly been designed to reduce capital outflows and bolster the yuan, which has slumped to 11-year lows against the dollar as a trade dispute with the United States batters China’s economy.
The central bank began to issue quotas again last week, but for lower amounts of gold than considered normal, three people with direct knowledge of the matter in London and Asia said – without specifying exact amounts.
“Some (quotas) have been given,” said one of the sources, adding that these were “less than usual.”
It’s a “partial lift” of the restrictions, another source said.
The Chinese central bank did not respond to a request for comment.
China is the world’s biggest importer of gold, with around 1,500 tonnes of metal worth some $60 billion – equivalent to one-third of the world’s total supply – entering the country last year, according to its customs data.
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.
Beijing has previously taken steps to curb capital outflows when its currency weakened. These steps included some restrictions on gold imports in 2016, sources have said.
No clear data for capital outflows exist but a measure from China’s balance of payments called errors and omissions points to $88 billion leaving in the first three months of this year, the most on record.
Chinese customs figures show the country imported 228 tonnes less gold in May and June – the last month for which data is available – than in the same two months of 2018.
By mid-August, up to 500 tonnes less gold had entered China since May than over the same period last year, people in the bullion industry said.
(By Peter Hobson; Editing by Veronica Brown and Mark Potter)