China is the largest producer of gold presently. None of its produced gold comes in market but goes in govt coffers simply. With hardly 1.7% of its declared resrves as Gold(1000 tonnes), China is sitting on a stockpile of foreign exchange. With amply cheaper Yuan, it is funding its exports through its painfully devalued currency and making its exports most competitive through a cleverly devised export subsidy which may be to the tune of 50%(unofficial figures only). With the kind of foreign exchange it is having, China has an insatiable apatite for gold, should any country decides to sell its.
With a large cheaper work force, its services exports are the cheapest and goods produced are also the cheapest. Still China may be one of few Nations with current account surplus due to large scale foreign remittances and FDI(appreciation in Dollar terms may be the best in China).
Are we heading towards Yuan as Gold Standard????
With a large cheaper work force, its services exports are the cheapest and goods produced are also the cheapest. Still China may be one of few Nations with current account surplus due to large scale foreign remittances and FDI(appreciation in Dollar terms may be the best in China).
Are we heading towards Yuan as Gold Standard????
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