China trimmed US$15 billion to US$25 billion worth of gold imports since May, or about 300 tonnes to 500 tonnes compared with 2018, Reuters reported Aug. 15, citing industry sources with direct knowledge of the matter.
The move is seen as a measure to curb outflow of U.S. dollars — which is used to purchase the bullion from the likes of Switzerland, Australia and South Africa — and strengthen its yuan currency amid a slow economic growth, gold industry sources said in the report.
China’s gold imports are typically conducted by local and international banks given monthly import quotas by the Chinese central bank. However, quotas have since been curtailed or not granted for several months, the report said citing seven sources in the bullion industry in London, Hong Kong, Singapore and China.
"There are virtually no import quotas now issued in China," one source said.
The Asian powerhouse is in the midst of a deepening trade war with the U.S., resulting in the slowest economic growth pace in nearly 30 years and pushing the yuan down more than 10% against the U.S. dollar since early 2018.