China’s ‘Gold Road’ Initiative Central to National Security, De-Dollarization and Global South Ties – S&P Global

According to a new S&P Global analysis, gold is viewed as a strategic mineral by China, playing a central role in long-term economic policies and national security strategy. The ‘Gold Road’ initiative is a key component of these efforts aimed at advancing yuan-denominated gold trading.

The report notes that China’s globalization strategy revived in 2022 after the pandemic due to Western sanctions on Russia, which heightened risks to foreign reserves. This prompted the People’s Bank of China to resume gold purchases and the Shanghai Gold Exchange to reinforce its 2019 initiative targeting BRICS, Belt and Road, and Global South countries.

The initiative envisions a network of offshore gold vaults starting with Hong Kong in 2025, boasting 150 tonnes capacity and plans to expand beyond 2,000 tonnes. Potential locations include Singapore, Dubai and Moscow to support yuan settlements outside the dollar system.

S&P Global analysts expect China’s role in global gold markets to grow further through these security-driven measures amid worldwide uncertainties.