Little by little, it’s becoming clear how far-reaching China’s Silk Road economic initiative really is.
Proposed in 2013 by President Xi Jinping, the Belt and Road Initiative involves massive infrastructure spending, growing trade along the Silk Road Economic Belt and 21st Century Maritime Silk Road.
Case in point is the promised massive $46-billion spending spree in neighboring Pakistan. Now, new information reveals that part of the initiative revolves around gold.
On May 23, the Xinhua news agency reported that China planned to launch a $16.1-billion (100 billion yuan) gold fund involving the Silk Road.
The fund, led by the Shanghai Gold Exchange (SGE), “will facilitate gold purchases for the central banks of member states to increase their holdings of the precious metal,” reported Xinhua.
The member states include about 60 countries that lie on the Silk Road, including the world’s two biggest consumers of gold – China and India. Together, these 60 countries currently account for more than half of the world’s gold production and 80% of the total global gold consumption.
But there’s a lot more to China’s plan than just having central banks buy gold…
You see, it’s generally believed that there are 16 gold-producing regions along the Silk Road. So it’s not surprising that gold mining projects will also be a target of the fund.
The fund’s two biggest initial shareholders are gold companies hoping to get in on the mining industry at a good price. Shandong Gold Group bought 35% of the shares, and Shaanxi Gold Group bought 25%.
Roland Wang, the Managing Director of the World Gold Council in China, said that “the initiative will help the Chinese gold mining companies jointly explore the precious metal industry in those countries [along the Silk Road].”
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