Is China Really Making Shanghai the Global Gold Capital and Ending Dollar Dominance?
Recent social media posts and market rumours claim that China has declared Shanghai as the “world gold capital,” is purchasing around 150 tons of gold daily, and that most Chinese exports are now invoiced in yuan rather than U.S. dollars. The story also alleges that China is deliberately dumping U.S. Treasury bonds to weaken the dollar. We examined these claims against official data and credible international reports to assess their accuracy.
China’s growing influence in the global gold market is undisputed. The Shanghai Gold Exchange has become one of the largest physical gold trading hubs in the world, and the People’s Bank of China (PBoC) continues to add to its reserves. However, several viral claims about China’s gold purchases and its efforts to replace the U.S. dollar in global trade have been exaggerated or misrepresented.
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What the Verified Data Says
| Claim | Public Evidence | Status |
|---|---|---|
| Shanghai declared global gold capital | No official statement found. Shanghai Gold Exchange is a major global hub but not formally declared “world capital.” | Unverified |
| China buying 150 tons gold per day | World Gold Council and Reuters report additions of 20–25 tons per month, not per day. | False / Exaggerated |
| Dumping U.S. Treasuries to devalue dollar | China’s holdings fell to about $759 bn (2024), lowest since 2009, showing diversification but not “dumping.” | Partially True |
| 70% of exports invoiced in yuan | Most Chinese exports still priced in USD; no verified data supports 70% yuan invoicing. | False |
| Exports priced on gold basis | No supporting evidence. Gold used as reserve diversification, not pricing mechanism for goods. | Unsubstantiated |
Data from the World Gold Council shows China’s total official gold holdings crossed 2,300 tons in 2025 after consecutive monthly purchases since late 2022. These acquisitions make China the world’s sixth-largest official gold holder, behind the U.S., Germany, Italy, France, and Russia. However, even this steady accumulation is far below the sensational numbers circulating online.
Understanding the Broader Strategy
China’s diversification away from U.S. dollar assets is part of a long-term monetary policy rather than an abrupt campaign. By gradually increasing gold reserves and promoting use of the yuan in bilateral trade agreements—especially through the Belt and Road Initiative—China aims to reduce exposure to the dollar-centric financial system. This is known as “de-dollarization.”
To explain key terms:
- 💡 U.S. Treasury Bonds: Debt securities issued by the U.S. government. Countries like China buy them to store reserves safely and earn interest. Selling them reduces exposure to U.S. debt.
- 💡 Purchasing Power Parity (PPP): An economic theory that compares currencies based on the cost of identical goods and services. More gold reserves don’t automatically increase PPP but can signal stronger reserves backing.
- 💡 De-dollarization: The global move by some nations to reduce dependence on the dollar for trade, financing, or reserves. China, Russia, and some BRICS members are gradually increasing non-dollar transactions.
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China’s Gold Policy in Perspective
China’s central bank began disclosing monthly gold purchases in 2022 after a hiatus. The PBoC adds roughly 10–25 tons per month depending on market conditions, using gold both as a diversification hedge and as a geopolitical signal of financial independence. Yet, daily purchases of 150 tons would imply nearly 55,000 tons annually—almost 28× its entire current reserves—making that figure impossible.
Regarding the yuan’s use in trade, China has promoted settlement in CNY via the Cross-Border Interbank Payment System (CIPS) and through direct currency swap lines with Russia, Brazil, and Gulf nations. However, according to the Bank for International Settlements, the yuan accounts for less than 5% of global SWIFT transactions, showing that the dollar remains dominant in global invoicing.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, notes that while China’s ongoing gold accumulation and reduced U.S. debt exposure reflect a strategic tilt toward self-reliance, viral claims of massive daily gold purchases or a full departure from dollar trade are overstated. Investors should interpret such reports cautiously and focus on verified macro data rather than sensational online posts. Gold remains a diversification tool, not a replacement for the global reserve system—at least not yet.
Discover more global macro insights and market-ready perspectives at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on China's Gold Policy
- How Much Gold Does China Really Own in 2025?
- Is Shanghai Replacing London as the Global Gold Hub?
- What Does China’s Treasury Sell-Off Mean for the Dollar?
- Will the Yuan Become the Next Global Reserve Currency?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
