Hong Kong: China has become the world's sixth-largest gold holder as the country seeks to diversify its reserve assets away from the US dollar, data showed Monday.
China's gold holdings came to 1054.1 tons as of March this year, according to the finance ministry, which cited data from the World Gold Council (WCG). The amount is nearly one-eighth of the US reserve.
The world's No 2 economy had maintained a gold reserve of 600 tons for the six years prior to 2009. The London-based WGC is an international non-profit organisation that provides investors around the world with key information about gold.
The United States topped the list by holding 8,133.5 tons of gold, followed by Germany with 3,406.8 tons. The International Monetary Fund, Italy and France came next with 3,005.3 tons, 2,451.8 tons and 2,435.4 tons, respectively, the ministry said.
China's gold holdings only account for 1.6 percent, or around USD 55 billion, of the country's total reserve assets of USD 3 trillion.
Gold has proved to be one of the most attractive investment assets, especially amid the financial and economic crises over the past years.
Market analysts see that China has a lot of room to increase its gold reserve.
More Chinese economists and advisers have suggested that the country's central bank should increase its gold reserves as a hedge against the falling values of other currencies.
China claimed earlier that its foreign exchange reserves suffered a loss of USD 271.1 billion on its reserves between 2003 and 2010, the National Development and Reform Commission (NDRC) said in a report.
The country is likely to lose USD 578.6 billion if the US dollar's exchange rate sinks to 6 yuan a dollar, said Zhang Anyuan, the head of the fiscal and financial policy research division of the NDRC.
The yuan surged to its highest level against the US dollar today following the recent decision by the global rating appraiser Standard and Poor's Ratings Service (S&P) to downgrade the US government's long-term debt.
The central People's Bank of China set the yuan's central parity rate at 6.4305 against the greenback, the highest since July 21, 2005, when China abandoned a decade-old peg against the greenback and shifted to a managed floating exchange rate.
First Published: Monday, August 08, 2011, 14:52