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China is looking at ways to ease the regulatory burden on gold imports and exports as it continues to diversify away from the US dollar.
Bloomberg reports that China, which is currently the largest consumer of precious metals, is planning to expand the issuance of “multi-use permits” – a faster approval system – by increasing the number of ports that can accept them.
The People’s Bank of China (PCOB) reportedly says that it is planning to extend the validity of the permits to nine months while also removing limits on the number of times they can be used.
According to a statement from the PCOB, the move aims to “enhance vitality and respond to external shocks by improving business environment at ports.”
Macro investor Luke Gromen recently said that by rapidly accumuating gold, China was rolling out an “elegant” solution to the yuan’s depreciation while ensuring that many of its citizens do not financially suffer.
“In theory, state-backed bank, state-backed debtor: debtor defaults on the bank, both state-backed, no loss. There’s no ability to flow out except on a limited basis through gold, but you already pre-loaded your citizens for 20 years with gold.
So the only way to capital in any real way out of China is for the price of gold to go up a lot in Chinese yuan… The gold that all of its citizens have been front-running for 20 years goes up. Their balance sheet goes up in yuan terms.
It’s very elegant.”
