Speculations about China’s increasing appetite for gold were confirmed today as Beijing revealed its gold holdings to the IMF. China now holds 1,054 tonnes of gold and has overtaken Switzerland, Japan and the Netherlands to become the world’s fifth-largest holder of gold. Beijing’s increased gold purchase is believed to be part of a greater strategy to diversify China’s foreign exchange reserves. As the world’s largest gold producer, China has the option to source gold supplies from local mines but might also refer to the open market for future purchases.
China will provide funding for domestic oil companies’ bids for overseas assets, according to an industry official. Taking advantage of slumping energy prices, the strategy will be part of Beijing’s new oil and petrochemical stimulus package, which is scheduled for announcement within a week. The stimulus plan includes more loans and preferential tax policies for petrochemical companies as well as an increase in oil-product stock-piles and domestic demand.
In an effort to revitalize its struggling textile sector, China announced plans to push for brand-building and higher value-added. Severely hurt by the decline in global demand, China’s textile industry now faces excess capacity, financing difficulties and job losses. While still concentrating on location-specific cost advantages, China’s also plans to build and promote 100 domestic textile brands strong enough to compete in the international market.
China on Thursday staged a parade of 52 Navy vessels and aircraft to mark the 60th anniversary of the People’s Liberation Army Navy. The parade, which was followed by naval delegations from 29 countries, demonstrated China’s growing naval power and included previously unseen nuclear-power submarines. A number of defence analysts in the U.S. and Europe see China’s naval build-up as a challenge to the U.S.–the world’s leading maritime nation. With a stronger Chinese navy, tensions might increase over the Taiwan Strait and disputed regions in the South China Sea.
