Today as we like to do every couple of years we consider all the gold in China. Next time the international money system comes under stress and that time may not be far away where the gold is, and who owns it, could be of great importance. The world's central banks have been stocking up on gold You may think gold is an antiquated asset, irrelevant to a modern digital world. China clearly doesn't. Since the global financial crisis, China has been accumulating gold at a staggering pace. The implications are considerable. There are going to be lots of numbers in this piece, so to anchor you with some kind of perspective, let me give you some of the major figures. Total global central bank gold reserves stand at just below 34,000 tonnes, which is roughly 20% of the 175,000-or-so tonnes of total above ground supply. The US is the world's largest owner with 8,133 tonnes. That number works out at around an ounce per citizen. Precious metals analyst Nick Laird reckons that if you add private and institutional holdings to this official 8,133 tonnes, there are 26,00027,000 tonnes in the US overall.

Below is table of central bank gold holdings, using World Gold Council Data data. In gold terms, these are the richest 20 nations. The UK sits proudly at 17th, two places below Kazakhstan and one above Lebanon. Tonnes % of forex reserves 1 United States 8,133.5 73.8% 2 Germany 3,369.7 69.1% 3 International Monetary Fund 2,814.0 4 Italy 2,451.8 65.8% 5 France 2,436.0 59.5% 6 Russia 2,066.2 17.6% 7 Mainland China 1,842.6 2.3% 8 Switzerland 1,040.0 5.1% 9 Japan 765.2 2.4% 10 Netherlands 612.5 66.0% 11 India 586.4 5.7% 12 European Central Bank 504.8 14.9% 13 Taiwan 423.6 3.5% 14 Portugal 382.5 63.6% 15 Kazakhstan 341.2 43.6% 16 Saudi Arabia 323.1 2.4% 17 United Kingdom 310.3 7.9% 18 Lebanon 286.8 20.1% 19 Spain 281.6 16.1% 20 Austria 280.0 47.4% Central banks, by the way, have increased their buying this year at the fastest rate since 2012. They now account for around 10% of annual gold demand. The People's Bank of China (PBOC China's central bank) announces its gold holdings every five years or so. The current stated figure is 1,842 tonnes. Below, we see China's holdings since the 1970s. So that's what they say they have. Now let's look at what they have accumulated. We'll start with what they've mined. In 2007, China overtook South Africa to become the world's largest gold producer, mining 276 tonnes. Last year it mined 430 tonnes, about 50% more than Australia, the world's second-largest producer. China now accounts for around 15% of total annual global gold production. But China keeps all of the gold it mines; it does not sell a single ounce abroad. As well as keeping all of the gold it mines, since 2010, China has ramped up its gold imports. In 2014, it overtook India to become the world's largest importer, buying gold from Hong Kong, Switzerland, London, Australia and Singapore. It is hard to get precise figures as many of these trades are over the counter, but Hong Kong does provide them and they are astonishing. Between Hong Kong imports and Chinese gold production, China has accumulated more than 10,000 tonnes of gold since 2000. (Charts courtesy of Nick Laird at goldchartsrus).

Meanwhile, all the gold that enters China must be sold via the Shanghai Gold Exchange (SGE), and it is possible to get numbers for SGE withdrawals since 2008. These take the grand total of imports and production to 14,111 tonnes. There is also, to add to this number, all the gold that was in China, whether as bullion or jewellery, prior to 2000. So how much gold does China really have? Not all of the gold that makes its way to China goes to the central bank, it should be stressed. Indeed, China has encouraged private accumulation of gold. Quite how much is falling into domestic hands is hard to quantify, but Bron Suchecki of the Perth Mint, studying gold flows, argues that China aims for private citizens to accumulate 55% of flow with the remaining 45% going to commercial banks and the Chinese central bank. Even if half of that 45% goes to the PBOC, then their holdings are likely to be higher than the stated 1,842 tonnes. However, as precious metals analyst Koos Jansen argues, the PBOC does not buy all its gold from the SGE. It goes elsewhere. There are several reasons for this. The SGE sells its gold in yuan and the PBOC prefers to use dollars. The PBOC likes to buy 12.5kg bars, which do not trade on the SGE. The SGE has stated that only consumers buy gold over its exchange although in practice that doesn't seem to be the case. The PBOC does not like to disclose all its gold purchases, which on the SGE it would have to do. It prefers "monetary gold" which does not require disclosure on customs reports. The PBOC prefers an OTC (over-the-counter) market such as London, to an exchange such as Shanghai (less disclosure required).