"Let’s stockpile 'gold'" Why China is jumping in… bold strategy unveiled [China Watch]

China pushes to sharply expand gold output

Bracing for global risks… bolstering self-sufficiency

The Chinese government is moving to expand gold production. The move comes as growing uncertainty in the global economy has reignited de-dollarisation debates aimed at reducing dependence on the U.S. dollar. With gold’s status as a safe-haven asset back in focus, Beijing is also seeking to strengthen self-sufficiency.

Drafting a gold industry development plan, upgrading mining and refining

According to the South China Morning Post (SCMP) in Hong Kong on the 6th, the Chinese government is drawing up policies to sharply increase domestic gold output over the next five years while advancing new mineral exploration results.

The China Gold Association has also convened a series of meetings this month by gathering experts to formulate a gold industry development plan. A statement released after the meetings said the plan aims, during China’s 15th Five-Year Plan period (2026–2030), to upgrade mining and refining technologies while expanding investment in high-end gold materials to meet surging domestic demand.

Anonymous experts who attended the meetings stressed the need to focus on removing technical bottlenecks. This includes accelerating development of deep mining technologies at depths of more than 2,000 m underground and developing advanced mining and extraction equipment.

Some industry officials said they would step up research into high value-added gold materials to raise gold’s value-add in manufacturing and high-tech sectors. Such materials include ultra-fine nano-gold products used in cutting-edge industries such as electronics and biomedicine.

Citing remarks by insiders, the association’s statement stressed that “resource security is the foundation for the stable development of the gold industry.” It also included plans to raise gold recovery rates from low-grade ore, hard-to-mine ore and complex ore, while pushing ahead with new gold exploration projects.

Seen as a strategic reserve asset and a tool for financial stability

In recent years, the Chinese government has intensified efforts to secure gold resources, as it views gold as both a strategic reserve asset and a tool for financial stability.

Another aim is to reduce reliance on the U.S. dollar while meeting domestic demand for jewellery and investment. China, the world’s largest gold consumer, faces a structural supply imbalance.

China accounts for more than 20% of global gold consumption, but its reserves make up only about 5%. Deteriorating ore quality, rising mining costs and a worsening production-to-reserves ratio are also weighing on long-term competitiveness.

An association official noted that “China’s total gold holdings are relatively low and do not match its international standing,” adding that this is even more apparent compared with the United States and the euro area, where gold accounts for more than 60% of foreign exchange reserves. In his view, domestic gold demand in China still has substantial room to grow.

China National Gold Group, a state-owned enterprise, said last week it would double revenue, assets and profit during the 15th Five-Year Plan period, while quadrupling gold output from its mineral deposits.

China’s Ministry of Industry and Information Technology announced in June last year a high-quality development plan for the gold industry to further strengthen the supply base for gold. The plan aims to increase resource reserves by 5–10% by next year and expand gold and silver output by more than 5%.

China has also steadily increased its gold reserves in recent years. According to the State Administration of Foreign Exchange, gold holdings rose by about 27 tonnes last year alone to a total of 2,306 tonnes. Consumer demand for gold bars and coins surged by more than 35% year on year last year.

Beijing=Correspondent Kim Eun-jung kej@hankyung.com