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China SAFE Reports Monetary Gold Holdings Increased By $11 Billion, Or 30%, In 2010, As Gross Foreign Financial Assets Pass $4 Trillion

Tyler Durden's picture




 

China's State Administration of Foreign Exchange (SAFE) has released its breakdown of 2010 international investments. In summary: financial assets abroad rose 19% last year to $4.126 trillion from $3.457 trillion. That includes the country's $2.914 trillion of foreign reserves at the end of 2010 as well as other assets such as direct investments, securities, and gold. As for gold, it increased by $11 billion from $37.1 billion to $48.1 billion, or a 29.6% increase (it is unclear if this number is at a fixed gold price or accounts for MTM). On the liabilities side, which increased from $1.946 trillion to $2.335 trillion, the biggest change was as a result of a surge in Foreign Direct Investment into China which increased by $162 billion to $1.476 trillion. Netting liabilities against assets leads to a net position of $1.79 trillion in external net assets.

Full breakdown of China's foreign-held stash:

Source

 

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Mon, 05/30/2011 - 09:11 | 1322218 eigenvalue
eigenvalue's picture

Are you sure they are holding gold not tungsten?

Mon, 05/30/2011 - 10:25 | 1322323 Temporalist
Temporalist's picture

Thanks MV!

Mon, 05/30/2011 - 12:16 | 1322610 kumquatsunite
kumquatsunite's picture

Turk is an idjat. For those of you who think gold is worth anything, don't forget that there are many places in history where you can view gold used as ornaments, gold used to "gold plate" or sheath items, so it wasn't used as money, but as decorative because it is shiny and purdy. Same thing silver. Once China starts having food problems because the people are hungry (after their all-the-Chinese-eggs-in-one-basket rice and other genetically modified crops begin to fail), the Chinse will be oh-so-happy to give up any/all gold/silver for them little rice grains they so love to eat. China, as with Japan, cannot feed their people. How many fat Chinese have you ever seen? Same with Japan? Same with India?

America is a breadbasket and that puts a giant bullseye on us for that huge military complex China has created, and which they consistently disavow they have, or that they will use.

However, even as the United States woodstockian idiot communists (Oboma's mother and his father....whoever his father is?) leftovers from the we-will-have-a-fun-weekend-and-leave-the-plastic-water-bottles-and-port-a-potties-for-someone-else-to-clean-up days of free love and sleep-on-the-couch-until-the-noon-sun-in-our-eyes-wakes-us decide that absolute and total collapse of the system might mean that "they" don't eat either, there may already be signs of incipient rebellion among those armed with a brain. 

It does seem that there has been enough reading of Pat Buchanan's books to potentially save this country if we readopt some tried and true methodologies. For instance, we have been told by the woodstockians not to "judge"; and yet it is judging that keeps us alive and well. Judging tells us to cross the street when the guy with the machete is walking down it toward us. Judging tells us to not associate with the walmuckians (welfarians who spend their free time thinking they are middle class because their welfare checks let them purchase cheap chinese stuff at walmart). Judging tells us that the STEALING of one-third of my adult children's income in taxes to redistribute to the blackmail baby dropping trash is antithetical to creating the motivation for endeavor and entrepreneurialism in this country. And finally, my least favorite word: diversity. Diversity has become a perverted combination of communist create-the-world-via-statistics and destroy-America-because-she-is-successful-via-trash-third-world-immigration-that-brings-leprosy-tuberculosis-and-bed-bugs. 

Ah yes, the fundamental principle of stupid is always this: Don't judge and destroy yourself. It'll work every time!

Mon, 05/30/2011 - 14:16 | 1322679 Bay of Pigs
Bay of Pigs's picture

On the topic of PM's, you are completely wrong. Listen to the clip.

I don't know if we'll see those high looking targets, but Turk has been correct the last 11 years running on gold and silver.

 

Mon, 05/30/2011 - 13:17 | 1322743 thriftymost
thriftymost's picture

Anecdotal but true: I've been in China for three years now, and every single Chinese woman I know wants to lose weight, not gain it.

Food is plentiful and cheap here.  In fact, one of China's great strengths is that it has such an abundance of farmland that it doesn't need to import much food at all, notwithstanding its huge population.  Why so many ZH'ers buy into this starving China meme is something I can't understand.

Mon, 05/30/2011 - 17:20 | 1323184 Al Gorerhythm
Al Gorerhythm's picture

Ugh.

Mon, 05/30/2011 - 09:17 | 1322227 sudzee
sudzee's picture

481 billion - 371 billion = 110 billion$ increase.

Mon, 05/30/2011 - 10:05 | 1322295 Urban Redneck
Urban Redneck's picture

 

I think the units in the table are USD 100 million, not USD 1 billion, despite what the spreadsheet header says. 

Can someone literate in Chinese check the original? 

 

Mon, 05/30/2011 - 10:22 | 1322314 blindfaith
blindfaith's picture

it does not matter, China is like a black hole...it all goes in and nothing comes out.  And the day it tries to leave China, they will nationalize it.

a surge in Foreign Direct Investment into China

Mon, 05/30/2011 - 09:27 | 1322238 GeneMarchbanks
GeneMarchbanks's picture

You had me at Holdings.

Mon, 05/30/2011 - 09:27 | 1322240 Fancy Bear
Fancy Bear's picture

How. many. ounces?.

Mon, 05/30/2011 - 09:31 | 1322246 Gunther
Gunther's picture

Based on London fixing data the price of gold went up by 27.7%.
In other words the Chinese added some 2% to their holdings if calculated by weight (and assumed that the reported numbers reflect reality.)
12/31/09: 1104$/oz
12/31/10: 1410.25$/oz
 + 27.7%

Mon, 05/30/2011 - 09:53 | 1322269 Urban Redneck
Urban Redneck's picture

.

Mon, 05/30/2011 - 10:01 | 1322293 Scisco
Scisco's picture

Beat me too it. My first thought was where was the gold coming from, promptly followed by did its value not go up by approximately the same amount?

Great example of why trying to forcast the price gold during monetary uncertainty is a fool's errend.

 

Mon, 05/30/2011 - 09:39 | 1322259 Urban Redneck
Urban Redneck's picture

Timmay must be heartbroken that China's US Treasury holdings are shrinking as percentage of foreign exchange reserves. 

But then what F/X reserves does the US have outside of whatever gold or tungsten is in KY & NY...

Mon, 05/30/2011 - 10:09 | 1322303 JW n FL
JW n FL's picture

I am Glad that Ben always fucks with the Price of Gold (PM's) after hours for us here in the U.S. so that China and the rest of the World gets the cheap fucking prices! and then by the time it swings around to us.. the price has been bought back up from the true lows that "The Ben-O-Cide" & "InfiniTimmy" lowered it to the day before..

 

Fucking Treason! lower the price for the rest of the World? But Not! Americans!

Mon, 05/30/2011 - 10:31 | 1322329 JW n FL
JW n FL's picture

and now the tax issue of transfering Gold or Silver to Loved ones as NOT! Money? is fucked in that State.. better think probate elsewhere!

Mon, 05/30/2011 - 10:14 | 1322307 trav7777
trav7777's picture

ah...the joys of mercantilism.

Mon, 05/30/2011 - 10:21 | 1322317 Temporalist
Temporalist's picture
Utah Law Makes Coins Worth Their Weight in Gold (or Silver)

http://www.nytimes.com/2011/05/30/us/30gold.html?_r=1&partner=rss&emc=rss

Mon, 05/30/2011 - 12:25 | 1322639 kumquatsunite
kumquatsunite's picture

Utah is full of idjats, don't pay any attention to them. Any group of people stupid enough to want to count the non-tithing dead (mormons baptize the dead because it's just so dam hard to get the alive to cede those God-given brains!; and by the way...if you believe the Mormons are honest, ask yourself why people aren't beating down the doors to get into Utah. After all, this is a country that spends good money on pet rocks, rubber bands for the wrist that look crinkled (what a racket!), and doesn't seem to mind paying hundreds of thousands of teachers to Fail to teach the children of our country, anyway, moving on...). Utah thinks that they are a private little country of one-upsmanship spouting honesty and honor even as they would sell the women into polygamy if they could just make it legal, and whose two-faced qualities include taking the money from prostitutes, gamblers, drinkers, and fornicaters (see: Harry Reid just loves his paycheck which is dependent on all of the aforementioned.)

One might ask what goal Utah has with this little move? And the answer might be that a very large shipment of gold went missing in the desert, stolen from the US Govt, back in the day as it crossed Utah's desert. Clock ticking sound...hmmm....do you think it could still be in Utah? So again, nothing about gold or silver is particularly special. Even when one considers the use in electronics and such, if they weren't available the entrepreneurs would figure something else out to use. Annnndddd...the profits have been taken for decades to come...they've been run up ahead of inflation, which will kick in as China powers down due to the US deciding to stop giving the walmuckians free money, after the interest rates start to rise...ah vicious circle, rinse, repeat. (Hey Mormons, don't leave me negatives, this is a free country and I don't have to like you!)

Mon, 05/30/2011 - 17:23 | 1323188 Al Gorerhythm
Al Gorerhythm's picture

Ugh.

Mon, 05/30/2011 - 10:22 | 1322319 camoes
camoes's picture

Even if it's only nominal capital appreciation it means they are not selling it either...imagine if they do decide to buy more (but I'd rather think that they would rather buy the mines and keep the production...)

Mon, 05/30/2011 - 10:45 | 1322368 Cthonic
Cthonic's picture

Does someone familar with this report know how to further break down lines 3.1 through 3.3?  Thanks, below is what I get from google translate, and I don't understand why a country with such huge foreign reserves is increasingly borrowing so much from abroad.

3.1 Trade credits: refers to China and other countries or between regions, with the direct import and export business credit. Assets that the receivables of exporters and importers to pay the import of advances; liability of the importer that imports should be advance payments and the purchase price of the exporter.
3.2 Loans: Assets of domestic institutions that provide loans to overseas and through other forms of inter-bank foreign assets held; liabilities that various types of loans borrowed by our institutions, such as loans from foreign governments, international organizations, loans, foreign bank loans and supplier credits .
3.3 Currency and deposits: asset that our financial institutions and stock exchange foreign funds deposited in cash, liabilities that absorption of overseas financial institutions, private deposits, short-term funds and foreign banks and private exporters to foreign borrowers and other short-term funds.

Mon, 05/30/2011 - 10:54 | 1322386 Urban Redneck
Urban Redneck's picture

Being somewhat plugged into the global fiat ponzi is a necessary step on the road to free-floating their currency and getting a more prestigious seat at the multilateral conference tables.

Also by borrowing a foreign currency (USD) and promising to repay (USD) later they create a hedge for existing USD debt currently held. 

Mon, 05/30/2011 - 11:01 | 1322409 Cthonic
Cthonic's picture

So, in effect, they've hedged their treasury holdings without selling them, to the tune of $700+ billion in one year, at least if USD transactions are supposed as the underlying currency of duration-matched borrowings, and other currencies are supposed as the underlying increase on the asset side?

Mon, 05/30/2011 - 11:23 | 1322466 disabledvet
disabledvet's picture

pretty smart, aren't they?

Mon, 05/30/2011 - 11:53 | 1322543 Cthonic
Cthonic's picture

Like the trick of removing a table cloth without disturbing the place settings, except here the whole dining table has been yanked away.

Mon, 05/30/2011 - 12:03 | 1322569 Urban Redneck
Urban Redneck's picture

China is a difficult beast to accurately quantify because there are a number different ledgers (both public and private) which are subject to central planning- the official public balance sheet, the aggregate balance sheets of the Chinese banks, the aggregate balance sheets of the State Owned Enterprises, the aggregate balance sheets of the Sovereign Wealth and Development Funds, and the aggregate balance sheets of whatever companies the Party Bosses secretly plan on nationalizing in the next year (like after the commodity crash a few years ago).

Then there are a bunch of F/X hedging mechanisms that can be divided across the different balance sheets- commodity futures positions, physical commodity stockpiles & strategic reserves (State Reserve Bureau), production/off-take agreements, foreign currency borrowings, the domestic USD denominated bond market (private sector), central bank swap lines, SWF equity investments, SOE equity investments, SWF/SOE convertible debt investments (e.g. Rio Tinto), multilateral stabilization debt (IMF & ASEAN), eurozone soverign debt, and US Treasury debt.

For each ledger and each line item there is a net amount. Unfortunately, to accurately calculate it you need access to PBoC or CPC data.  Since the best idea that the loose lips of the CIA can come up with is "Greece is in deep doo-doo" I don't think anyone will be able to provide a detailed accurate F/X exposure model before the PBoC feels ready to disclose it. 

So, in theory they could have hedged $700 billion in Treasury exposure last year, but I have no way of calculating the exact amount, and I don't think they had $700 billion in unhedged Treasury exposure at the beginning of last year to hedge.  However, even the hedges do need to be tweaked for effiency or to reflect subsequent changes.  China has been publicly, but quietly, diversifying away from the dollar since at least December 25, 2008.

Mon, 05/30/2011 - 11:04 | 1322422 theprofromdover
theprofromdover's picture

$4 trillion?

and Timbo and his friends think they can devalue all western currencies without retribution?

If he doesn't think China will let this happen, he must think it is us suckers who are going to foot the bill.

I guess it's either WWIII or stalinist dictatorships in US-A & US-E .....

(Man the barricades)

 

Mon, 05/30/2011 - 11:39 | 1322483 bid the soldier...
bid the soldiers shoot's picture

Let some other smart ass, tin foil hat fetishist see this to be recompensation by the Chinese for the humiliating and economically destructive terms of the the Peking Protocol in 1901, which ended the Boxer Rebellion and was signed the the 8 Nation Alliance.

"Vengeance is mine," saith the Kung Pao, "I shall repay."

Mon, 05/30/2011 - 12:01 | 1322573 Smiddywesson
Smiddywesson's picture

If central banks are quietly acquiring gold, then we are unlikely to find anything by dumbed down evidence in any officially released information.

I'm not surprised that gold gets knocked down when NY is closed.  The major reactions to such events would occur in the biggest markets.  They don't want any notice of what they do.  Even though the Western press is a joke, the Eastern is even more tightly controlled.  They don't want anyone to buy cheap unless it's them.

Mon, 05/30/2011 - 12:58 | 1322710 koot
koot's picture

I have read the above and not one comment about what China is really doing.  Close but no cigars. 

China is buying and arranging access to world people and resources with an olive branch, while the US and demunitive allies use a sword.  What better way for China to increase its gold and resources than to gain access to the planets reserves.  China is mining World gold with only very minor bullion purchases.

Mon, 05/30/2011 - 22:28 | 1324180 Dolemite
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