China’s gold chase to gain pace in an uncertain world

This is a thought leadership report issued by S&P Global. This report does not constitute a rating action, neither was it discussed by a rating committee.

This report is made possible by the S&P Global Institute's China Research Lab, S&P Global Energy’s global mining research team, and S&P Global Ratings’ mining teams in China, Australia, Canada, and South Africa

Highlights

China has recognized gold as a “strategic mineral” critical to the country’s security amid rising uncertainties in the world. S&P Global believes this signals that China will continue to build its holdings and step up support for its gold industry. These efforts will fuel Chinese miners’ expansion against the slower growth of their global peers. They will also help China retain its place as the largest consumer and producer amid the gold chase across the developing world.

China’s efforts in gold are more comprehensive and lasting in nature than a simple “gold grab.” They are motivated by the country’s long-term aims such as raising economic resilience and broadening global use of the renminbi.

As such, we expect these efforts to see gradual progress but continued commitment. They will drive a wide range of government actions, including building gold holdings, promoting yuan-based gold trading, and supporting gold exploration and production globally.

Events since the 2022 escalation of the Russia-Ukraine war have led to a renewed push on these fronts. They also led to a global gold chase among governments and savers, which in China was further propelled by a five-year-long property market downturn.

Despite this, China’s gold holdings have grown more slowly and remain smaller than most countries as a share of official reserves. In size, it ranks only sixth in the world. This will likely support sentiment for further build-up through purchases or production.

These factors drove top Chinese miners to accelerate expansion at home and abroad while their global peers kept output stable. Supported by improved execution and strong finances, we expect them to pursue this strategy without weakening their credit profiles.

In 2025, China opened its first offshore gold vault in Hong Kong as part of its “Gold Road” initiative. The vault will serve as a model for an envisaged global network of gold vaults that supports yuan-based gold trading and gold-backed yuan conversion outside the US dollar.

We expect China to pursue these and other plans for gold as international tensions and conflicts continue to arise. In the uncertain world ahead, one certainty may be that China’s role in the global gold market will grow further as these efforts unfold.

Strategic mineral for a world in ‘disarray’

During an April 2026 meeting in Beijing with Spanish Prime Minister Pedro Sánchez, President Xi Jinping remarked that “the international order is crumbling into disarray,” flagging a concern Beijing has been raising as tariffs and conflicts cast increasing uncertainties over the global trade and security order.

These uncertainties have reinforced the importance of gold among Chinese policymakers. As a result, its role was elevated from a financial asset to a strategic cornerstone, implying that China will prioritize gold and the gold industry in the years ahead.

In 2025, nine top departments of the Chinese government, including the National Development and Reform Commission (NDRC), Ministry of Industry and Information Technology (MIIT), and the ministries of natural resources, commerce, and others released the “Gold Industry High-Quality Development Action Plan 2025-2027” (the “2025 Plan”).

The plan recognized gold as a “strategic mineral” and a “cornerstone of China’s financial and industrial security,” marking a shift from past guidance by focusing on gold’s strategic significance to the country’s security. This came as national security objectives became the central organizing principle behind China’s policies.

From privatization to largest producer and consumer

This shift is notable relative to policies that have historically focused on production and market development (Figure 14). In a few decades, these policies allowed China to become the world’s largest gold producer and consumer. The renewed focus could lead to similarly significant outcomes.

In 2004, China privatized its gold market and ended over 50 years of strict state control of the mineral. This was followed by reforms to expand gold supply, encourage individual investments in gold, and develop the institutional capacity of the country’s exchanges and banks to trade bullion and offer retail gold products (see box).

These efforts led China to become the world’s largest gold producer in 2007, a position the country has held since. This was in part due to the slowing or falling output of other top gold-producing countries such as Russia, Australia, and the US over much of the last decade (Figure 2).

How did China become the world’s largest gold producer?

In 2004, China privatized its gold market. Individuals were allowed to legally own and sell bullion. Gold investing was encouraged to “store gold among the people.” Banks were permitted to offer gold investment products to the public. Licensing barriers to manufacture and retail gold jewelry and other physical products were also removed.

In 2005, the Shanghai Gold Exchange (SGE) and the Industrial and Commercial Bank of China (ICBC) launched physical gold trading for individuals. A year later, Bank of China introduced gold options to customers.

In 2008, the Shanghai Futures Exchange (SFE) launched China’s gold futures market, and in 2009, ICBC offered the first long-term gold investment plans for individuals.

To keep up with the resulting demand, domestic and foreign investments were encouraged to upgrade production management and technology and to consolidate small, inefficient mines. The NDRC’s gold five-year plan for this period (2006-2010) also focused on boosting production, intensifying prospecting, and verifying reserves.

In 2007, China became the world’s largest gold producer, overtaking South Africa, which had held the position for a century prior.

In 2010, in the “Guiding Opinions on Promotion of the Gold Market” (2010 Guidance), China recognized gold as an important asset class in its financial system in addition to being a key industrial commodity.

Issued by six top government departments, including the People’s Bank of China (PBOC), NDRC, MIIT, Ministry of Finance, and others, the 2010 Guidance fueled broader reforms that liberalized gold imports and boosted gold production to meet booming demand unleashed by earlier measures (see box).

These policies allowed China’s gold consumption — defined as retail buying of gold jewelry, bars, and coins — to become the world’s largest in 2013. Since then, Chinese gold consumption has stayed well above the next largest country (India), amounting to roughly 5x the US, 3x Europe, and nearly double all other emerging markets combined (Figure 3).

How did China become the world’s largest gold consumer?

Continuing the market development push of the 2000s, the 2010 Guidance focused on protecting investors, promoting gold trading, offerings, and risk management by banks, and improving pricing and liquidity in the SGE and the SFE.

It also allowed more banks to import gold, opened the market further to foreign firms, and supported the sustainable development of gold mining.

In 2012, banks began interbank over-the-counter trading of gold. A year later, China’s first gold exchange-traded fund was launched. Meanwhile, more banks received licenses to import gold, including smaller banks.

Foreign firms, allowed on the SGE in 2008 and the SFE in 2011, were also permitted to import gold from 2013. That year, China’s gold consumption overtook that of India to become the world’s largest.

From globalization to strategic shift

The next phase in China’s gold policies — globalization — was interrupted by the pandemic but was revived by a renewed focus on gold that will likely drive Chinese efforts for years to come.

The globalization drive began with the SGE’s launch of its international board (SGEI) in 2014. Motivated by Beijing’s aim to broaden global use of the yuan, this phase unfolded with China’s push to set up renminbi clearing facilities and swap agreements with trading partners (see report by S&P Global’s China Research Lab, Saudi-China ties and renminbi-based oil trade, published Aug. 20, 2024).

In 2016, SGEI introduced China’s yuan-based global benchmark — the Shanghai Gold Benchmark Price (SGBP). This was followed by the 2017 launch of the first futures contract in yuan outside China on the Dubai Gold and Commodities Exchange and the 2019 launch of futures trading in yuan and US dollars on the COMEX.

The globalization drive slowed during the pandemic, but it resumed with greater urgency in 2022. That year, Western sanctions froze Russia’s foreign exchange reserves due to the Russia-Ukraine war. This raised concerns among policymakers in China and elevated the importance of gold as a potential way to address such risks.

As a result of this and other ensuing events, national security objectives such as improving economic resilience and reducing foreign reliance were elevated to become central organizing principles behind China’s policies (see report by S&P Global’s China Research Lab, China’s dual industrial mandate: Autonomy and productivity, published April 22, 2026).

While some see the economic advantages of trading gold in yuan or holding gold as reserves as debatable for China, this implies that such considerations will likely be outranked by the new security objectives.

In late 2022, the PBOC resumed its gold-buying spree, after a three-year pause (Figure 4), while the SGE restarted its active pursuit of the “Gold Road” initiative, first launched in 2019.

The yellow BRICS road

The Gold Road (also reported as “Gold Corridor”) aims to promote yuan-based gold trading and settlement globally. Driven by China’s long-term aims such as broadening yuan-use, improving resilience, and reducing reliance on the US dollar, the initiative will likely see gradual progress but continued commitment.

Targeting countries across BRICS and the Belt and Road, the initiative also aligns with Beijing’s trade and diplomatic efforts in the Global South (see report by S&P Global’s China Research Lab, China Inc. heads to Global South in the age of tariffs, published Aug. 19, 2025).

The Gold Road’s latest initiative aims to establish a global network of gold vaults that supports gold trading in yuan and yuan conversion into gold stored in the vaults. As more such vaults open in partner countries, they would form a multilateral network for yuan-based gold trading, conversion, and custody outside the US dollar.

The first such offshore vault was launched in Hong Kong in 2025, along with two yuan-based gold contracts that settle in cash or physical delivery, including to the new vault.

Other potential locations reportedly include regional gold trading hubs such as Singapore, Kuala Lumpur, Dubai, Riyadh, Moscow, and others. The network offers connectivity to the world’s largest physical gold market. It could also attract countries looking to diversify, onshore, or nearshore their gold storage to enhance control.

While it remains unclear how future vaults will be built, operated, and received in partner countries, we expect the first vault in Hong Kong to serve as a model (see box).

Set up behind China’s first offshore vault in Hong Kong

The SGE’s first offshore vault is located at the Hong Kong International Airport Precious Metals Depository (the “depository”). Owned and certified by the SGE and operated by the Bank of China (Hong Kong) Ltd., the vault has 150 tonnes of initial capacity.

Hong Kong plans to expand the city’s gold storage capacity tenfold to over 2,000 tonnes in three years to create a “regional gold stockpiling hub.” This amounts to just shy of China’s entire gold reserves, nearly a third of the vaulted gold at the Federal Reserve Bank of New York, or 40% of that at the Bank of England in London.

Expansion plans for the depository designate the Hong Kong Airport Authority (HKAA) to lead the project, which will be owned and financed by HKAA and a group of core users. These reportedly include banks such as ICBC and firms such as SF Holdings Co. Ltd.

The depository operates on the SGE’s physical gold warehousing management regime, supported by a centralized clearing system for gold trading. Trial launched on July 7, 2026, this system is managed by the Hong Kong Precious Metals Central Clearing Co. Ltd. (HKPMC). The Hong Kong government owns and appoints the Chairman of HKPMC’s board, which has an SGE-appointed Deputy Chairman.

The gold chase across the developing world

In addition to the renewed focus on gold in China, events since 2022 have also led to a gold chase among central banks and savers across the developing world. We expect these forces to remain in play as global uncertainties continue to arise.

While coverage of central bank gold-buying often focuses on China, this phenomenon is global in nature (Figure 5), particularly among emerging markets.

Central bank gold reserve holdings have more than or nearly doubled since 2022 across developed (1.8x) and developing countries (China 2.1x, Africa 2.2x, Asia-Pacific 1.9x, others 2.1x). Much of this increase, however, is driven by the surge in gold prices.

Stripping out prices shows that developed countries largely held on to what they had while developing countries built up their holdings more actively. Since 2022, gold reserves in tonnes among the latter rose 19% in Africa, 18% in China, 5% in Asia-Pacific, and 13% elsewhere, versus a stagnant 0.2% in developed countries (Figure 6).

This led gold to climb as a share of official reserves (gold plus foreign exchange) in China as well as across the rest of the developing world. Rising global uncertainties and the resulting push to diversify official reserves since the 2022 escalation of the Russia-Ukraine war is likely the key common driver.

The need to catch up or keep up

Despite the chase, China’s gold holdings have grown more slowly and remain smaller than most countries as a share of official reserves (Figure 7). In size, it ranks only sixth in the world. This will likely support sentiment for further build-up through purchases or production.

Since 2022, China’s gold holdings as a share of official reserves increased 3.4 percentage points (ppt) to 6.7% — a far slower rise to a lower level compared to the country medians of Africa (up 13.4 ppt to 17.5%), emerging Asia-Pacific (up 3.8 ppt to 9.45%), and developed markets (up 7.3 ppt to 16.6%).

According to the International Monetary Fund, China’s official gold reserves at the end of 2025 totaled $324 billion in value, which is less than a third of that of the US ($1.14 trillion) and behind that of Germany ($470 billion), Italy ($344 billion), France ($342 billion), and Russia ($327 billion).

To many Chinese observers, this presents a major mismatch. For example, Shandong Gold’s nonferrous metals CEO, Pei Dianfei, recently noted that a key challenge for China is that it has only a “midsized” official gold reserve that ranks sixth globally despite being the world’s largest consumer and producer.

Like most countries, China has not set a target in this regard. However, such discussions in Chinese policy and industry circles suggest a perceived need to catch up or keep up.

This may help explain the PBOC’s periodic buying sprees (Figure 4), which tend to occur during gold price downturns (2013-2016) or major events that drove global uncertainties (2018-2019: US tariffs, 2022-2023: Russia-Ukraine).

According to the PBOC, China’s gold reserves grew by over 40 tonnes in the first half of 2026 — more than double the 19 tonnes in the first half of 2025, coinciding with the start of the Iran War and the nearly 30% peak-to-trough swing in gold prices.

The gold chase beyond central banks

In addition to central banks, individual savers are also driving this global chase. In China, their demand for gold will likely lead to further support for the industry, particularly under elevated uncertainties at home and abroad.

Since 2022, consumer purchases of gold bars and coins have surged while those of gold jewelry have fallen by a similar extent (Figure 8). As the former reflects the desire for savings, and the latter, for luxury spending, we see escalating global uncertainties as the key driver, especially in developing countries.

In China, savers have been facing additional uncertainties from slowing economic growth, rising US tensions, and a five-year-long property downturn that has eroded their savings since 2022, when home prices began to fall.

As a result, they purchased more gold bars and coins (Figure 9), as gold has been promoted as an alternative store of savings since the market development reforms of the 2000s (Figure 14).

Why the stagnant global supply despite surging prices

Under government guidance and robust domestic demand, we expect Chinese gold miners to continue to expand at a faster pace than most of their global peers.

Despite surging prices since 2022, global gold production remained stagnant (Figure 10). This is due to rising mine lead times, mounting capital expenditures (capex), and the cautionary experience from the last down-cycle.

According to an S&P Global Energy study of 232 mines (Figure 11), average mine lead times from discovery to production rose to 17.5 years in the last five years (2020-2025) — nearly double the 10.6 years a decade earlier (2000-2009) (see From Discovery to Delay: Mine Permitting Stretches Project Timelines, published June 15, 2026).

Longer time for exploration, permitting, and financing are the key causes. Lead times for gold (15.9 years) are shorter than nickel (18.1), zinc (17.7), and copper mines (17.5), but not by much.

Moreover, once production starts, mines tend to continue operating even at trough price levels, as shutting down is typically more costly. Given this, expansions are necessarily decades-long commitments. Generally, decisions to undertake new mines occur every 5-10 years, and they rarely align with cyclical price peaks or troughs.

Meanwhile, new gold mines have proven difficult to find and expensive to bring into production (see report by S&P Global Ratings, “Gold is in the Balance Sheet, Not the Price, for High-Yield North American Gold and Silver Miners,” published March 16, 2026).

Although gold prices have risen in the past decade, so have costs. As mines age, more capex is needed to sustain production against the grind of lower ore grades, particularly in more complex mines. For example, in South Africa, mines often reach 3 kilometers or more underground, which require more capital as well as labor costs.

Lastly, prudence in expansions is also reinforced by the experience of the last down-cycle, when gold prices fell every year during 2013-2015 by a total of 30%. More notable was the volatility and the duration — prices fell nearly 30% in just the first six months of 2013 and did not return to their peak for another seven years after.

This strained many global miners and pressured their stock prices. For example, those of Newmont Corp. (BBB+/Stable), Barrick Mining Corp. (BBB+/Stable), and Gold Fields Ltd. (BBB-/Stable) dropped 58%, 77%, and 76%, respectively, during this period.

Although their credit ratings were more resilient, having fully recovered recently as record gold prices and cash flows drove leverage to historical lows, the episode nevertheless showed what they may need to bear in a multiyear downturn.

How Chinese gold miners differ from global peers

China’s top gold miners differ from their global peers in that they operate according to national priorities in addition to economic rationale. They also face a more supportive domestic environment.

Most top Chinese miners are majority or minority-owned by China’s central or local governments. As such, they tend to incorporate Beijing’s key policy aims into their core strategy.

For example, after the 2025 Plan recognized gold’s strategic importance to China, the CEO of Zijin Mining Co. Ltd. (Zijin), Chen Jinghe, emphasized gold as the “anchor of financial stability,” while the CEO of Shandong Gold Group Co. Ltd., Zhang Xiaohai, committed the firm to “find deposits and produce gold for the country.”

Under export controls, effectively all of the Chinese gold miners’ domestic production is sold in China, where prices tend to be modestly higher than global levels due to import controls and robust demand. Overseas production beyond local sales requirements also tends to find its way back to China, imported by Chinese buyers.

Although Chinese miners faced similar price pressures in the last gold down-cycle, their policy and demand environment at home remained supportive. At the start of the downturn in 2013, China became the world’s largest gold consumer, driven by robust demand and Beijing’s push for more production and imports (Figure 14).

Chinese miners’ gold chase at home and abroad

Given the above, we expect China’s top miners to grow faster than their global peers, leading more to enter the ranks of top global producers (Figure 12). Improved execution, strong balance sheets, and ample financing will allow them to pursue this strategy without weakening their credit profiles.

China’s exploration efforts may provide the country’s miners with more domestic resources. Government guidance to intensify prospecting since the late 2000s (Figure 14) led to an unprecedented recent streak of “supergiant” discoveries — rare deposits with over 1,000 tonnes of gold ore. These include Wangu in 2024 (Hunan province) and West Kunlun (Xinjiang), Dadonggou (Liaoning), and Jiaodong (Shandong) in 2025.

In production, top Chinese miners have stepped up consolidations at home and acquisitions abroad (Figure 13). Zijin and Shandong Gold, for example, have been active acquirers historically, but the scale of their M&As has grown by multiples since 2022 to billions of US dollars from hundreds of millions in the years prior.

These acquisitions are also increasingly global, including in countries across Asia-Pacific (Laos and Papua New Guinea), Central Asia (Kazakhstan), Latin America (Brazil, Peru, Guyana, Colombia, Ecuador, and Suriname), and Africa (Mali, Ghana, Ethiopia, Namibia, Ivory Coast, Sierra Leone, and the Democratic Republic of Congo).

Improving execution capabilities has facilitated this global expansion. These include speeding up financing and time to production, introducing technologies and efficiencies, and stabilizing output and restoring profitability (see report by S&P Global Ratings, China Commodities in Charts: Strong Balance Sheets Support Miners’ Global Expansion, published April 12, 2026).

As a result, Chinese miners’ overseas production has been accelerating. According to the China Gold Association, in 2025, China’s domestic gold production rose only 1% to 381 tonnes, while overseas production of the country’s top miners surged 25% to 90 tonnes.

Further acquisitions will be increasingly challenging, as nearly all of the world’s shallow, high-grade gold deposits have already been exhausted. Top Chinese miners have emphasized the need for prudence in this regard. The cancellation of Zijin’s US$4 billion acquisition of Allied Gold Corp. also shows regulatory concerns in this regard.

A more certain path in an uncertain world

We expect China to pursue these and other plans for gold as tensions and conflicts continue to arise around the world. These plans incorporate past policy goals as well as new security considerations.

Motivated by the country’s long-term aims to raise economic resilience, reduce foreign reliance, and broaden the global use of the renminbi, these efforts will likely see gradual progress but continued commitment.

Meanwhile, robust domestic demand and the perceived need to catch up or keep up amid a global gold chase will likely support sentiment for further build-up, whether through periodic purchases or continued production expansion.

Top Chinese gold miners are aligned with these aims and supported by improved execution, strong balance sheets, and ample financing. Against the slower growth of their global peers, more are likely to move up the ranks of the world’s top producers.

In the uncertain world ahead, one certainty may be that China’s role in the global gold markets will grow further as these efforts unfold.

Contributors: Torisa Tan, Mengwei Fan, April Pascual, James Mantooth, and Bee yong Khoo