China Gold Import Jan-Sep 777t. Who’s Supplying?

Submitted by Koos Jansen,

While the gold price is slowly crawling upward in the shadow of the current cryptocurrency boom, China continues to import huge tonnages of yellow metal. As usual, Chinese investors bought on the price dips in the past quarters, steadfastly accumulating for a rainy day. The Chinese appear to be price sensitive regarding gold, as was mentioned in the most recent World Gold Council Demand Trends report, and can also be observed by Shanghai Gold Exchange (SGE) premiums – going up when the gold price goes down – and by withdrawals from the vaults of the SGE which are often increasing when the price declines. Net inflow into China accounted for an estimated 777 tonnes in the first three quarters of 2017, annualized that’s 1,036 tonnes.

Exhibit 1.

Demonstrated in the chart above Chinese gold imports and known gold demand by the Rest Of the World (ROW) add up to thousands of tonnes more than what the ROW produces from its mines. One might wonder where Chinese gold imports come from, which is why I thought it would be interesting to analyse as detailed as possible who’s supplying China. Is one country, or only the West, supplying China? Although absolute facts are difficult to cement, my conclusion is that China is supplied by a wide variety of countries on several continents this year.

China doesn’t publish its gold import figures so we have to measure exports from other countries to the Middle Kingdom for this exercise. This year the primary hubs that exported to China have been Switzerland and Hong Kong. The Swiss net exported 18 tonnes to China in September, which brings the year to date total to 221 tonnes, down 4 percent year on year. Because Switzerland is the global refining centre, a storage centre and trading hub I’ve plotted a chart showing its gross imports and exports per region.

Exhibit 2.

I’ve included Asian countries with significant mining output that are net exporters at all times, like Uzbekistan, in ROW to get the best perspective of above ground stock movement.[/caption] In the above chart we can see that Switzerland was a net exporter to China in all months, but in most months Switzerland in total was a net importer, displayed by the red line; for each of those months Switzerland itself was not the supplier to China.

Combined with data from Eurostat (on the UK’s total net flow) and USGS (on the US’ total net flow) the Swiss data tells me that gold moving from Switzerland to China had several sources this year. In January, for example, it was the UK that was supplying - being a net exporter in total and a large exporter to Switzerland. I must add that in theory little gold from the UK arrived in China via Switzerland, as the numbers don’t say which bar from whom was sent to who. But we can say “the UK made it possible China bought an X amount of gold in the open market at the prevailing price that month”. The same approach suggests that in June it was the US and Switzerland (Switzerland being a net exporter that month), and in September it was Asia (including the Middle-East) supplying gold to customers of Swiss refineries at the prevailing prices. There was not one source of above ground stock that exported to China (via Switzerland) as far as I can see.

The Hong Kong Census And Statistics Department (HKCSD) has recently published data indicating China absorbed 30 tonnes from the Special Administrative Region in September, down 8 percent relative to August and down 44 percent compared to September last year. A decline was expected because China has stimulated direct gold imports circumventing Hong Kong since 2014. Nevertheless, Hong Kong net exported 515 tonnes to the mainland through the first three quarters of 2017 (down 15 percent year on year).

Exhibit 3.

Hong Kong is a gold trading hub too, though. If Hong Kong is a net exporter to China, the actual source can be any country. Have a look at the next chart that shows the net flows through Hong Kong per region: the West, East and ROW (1). I’ve also added the net flow with China.

Exhibit 4. I’ve included Asian countries with significant mining output that are net exporters at all times, like Uzbekistan, in ROW to get the best perspective of above ground stock movement. To be clear, the blue line + the grey line + the yellow line = the red line. All lines are “net import”, calculated as import minus export. While Switzerland is included in the West, gold from all over the world can flow via Switzerland to Hong Kong.

First observe the red line, “Hong Kong total net flow”. We can see that in 2013 Hong Kong became a massive net importer until about half way through 2015. The major suppliers to Hong Kong during this period were Switzerland and the UK, next to the ROW.  I’m not aware of what type of entities were accumulating in Hong Kong at the time. The largest net importer from Hong Kong was China (included in the East).

After 2015 supply from the West (through Hong Kong) has slowly dried up while demand by China continued, shown by the blue line coming to zero and the yellow bars remaining to trend sub-zero. And thus Hong Kong commenced net exporting gold itself as we can see the red line in the chart falling far below zero. Apparently, since 2015 Hong Kong is a net exporter.

How much gold is left in Hong Kong? Unfortunately, online data from the HKCSD goes back only to 2002. The HKCSD does keep physical records from its international merchandise trade statistics from before 2002 but strangely “gold export” from 1972 until 1998 is omitted in these books (2).

Exhibit 5.

As you can see in this last chart Hong Kong has suffered net exports from 2002 until 2008 and after 2015. It’s possible there is still bullion in Hong Kong if it had been accumulated before 1998, but since 1998 Hong Kong already “net lost” 727 tonnes. Another possibility is that refineries in Hong Kong import a lot of scrap gold, which is nearly impossible to track in customs reports and is not included in any of my data, that is being refined into bullion and exported. In this case Hong Kong is not a net exporter, or less of a net exporter. We’ll see in coming months or years if Hong Kong can continue net exporting bullion.

In exhibit 4 we can see a vague correlation between “Hong Kong net export to the China” and “Hong Kong’s total net export” for 2016 and 2017. It looks like Hong Kong is feeding its big brother. Or is it?

There is a gold kilobar futures contract listed on the COMEX that is physically deliverable in Hong Kong. The trading volume of this contract is neglectable, and so is physical delivery, but remarkably the designated vault (Brinks) throughput is sky-high. When looking at a chart of kilobars received and withdrawn at the Brinks vault in Hong Kong, supplemented by cross-border gold trade, there is a pattern revealed: the amount of kilobars received and withdrawn, and Hong Kong’s gold total import and re-export to China are correlated.

Exhibit 6.

The chart suggests that Hong Kong is mainly supplying China from its imports (and any gold supplying other countries than China was stored in Hong Kong in previous years or was sourced from scrap). As the imports are correlated to kilobars received in the Brinks vault and kilobars withdrawn are correlated to re-exports to China, both flows seem to be one and the same trade. I don’t know for sure, but I think this is largely true. The next question is from what countries does Hong Kong import bullion to dispatch to China? From countries all over the world. Have a look.

Exhibit 7.

The composition is quite diverse. From the first until the the third quarter of this year gold came in from Switzerland, South-Africa, the US, Australia and the Philippines, inter alia.

Next to gold flowing through Switzerland and Hong Kong to China, countries that supplied gold directly to China this year have been Australia at 20 tonnes (3), the US at 14 tonnes, Japan at 3 tonnes and Canada at 4 tonnes. The UK has practically exported zero gold directly to China this year. In total Hong Kong (515 tonnes), Switzerland (221 tonnes), Australia (20 tonnes), the US (14 tonnes), Japan (3 tonnes) and Canada (4 tonnes) net exported 777 tonnes to China mainland in the first three quarters of 2017 (4).


It must be mentioned that in theory gold import by China arrives in the Shanghai Free Trade Zone (which is not the domestic market) where the Shanghai International Gold Exchange (SGEI) operates. As most of you know the SGEI can serve foreign customers that can import gold traded on the SGEI, for example into India. Hence, it’s possible not all gold imported into China mainland arrives in the domestic market but ends up in the Shanghai Free Trade Zone or abroad. Global cross-border trade statistics by COMTRADE, however, show that barely any country is importing from China.

Until new evidence shows up my best guess is that China net imported 777 tonnes in the first nine months of 2017, sourced from all corners of the world: the UK, South-Africa, Australia, Switzerland, the US, Middle-East and Philippines. It seems Chinese banks are active all over the world looking to buy gold on the dips, snapping up physical metal when the time is right.

Chinese imports add to China's domestic mining output. The China Gold Association disclosed on November 1 that mine production accounted for 313 tonnes, down 10 % compared to last year. Nearly all this gold (313 + 777) is sold through the SGE. Withdrawals from the vaults of the SGE accounted for 1,505 tonnes over this period, implying 415 tonnes (1,505 - 313 - 777) was supplied by scrap and disinvestment (or partially recycled through the SGE system).

Since all non-monetary gold imported and mine production ends up in the private sector, my estimate for total gold owned by the Chinese people now stands at 16,575 tonnes. Added by a more speculative estimate of 4,000 tonnes held by the PBOC makes 20,575 tonnes.

Exhibit 8.

If you like to learn more about the Chinese gold market please read The Chinese Gold Market Essentials or visit the BullionStar University.


1) Hat tip to Nick Laird from for providing the HKCSD data from January 2002 until September 2017.

2) Huge hat tip to Winson Chik that went to the HKCSD office in Hong Kong for us to obtain the data from before 2002!

Exhibit 9. Courtesy Winson Chik.

3) The Australian Bureau of Statistics (ABS) amended its gold export data to China and Hong Kong until August 2016. Before that I had my own way of computing direct gold export from Australia to China - which is now obsolete. A few days ago I got confirmed by ABS they stopped amending the data as China has allowed gold import bypassing Hong Kong. ABS data on gold export to China can now be taken at face value. On November 10, 2017, ABS wrote me:

Previously ABS amended exports of gold bullion going to Hong Kong to China as at the time the ABS had been provided with information to suggest that the majority of gold exports to Hong Kong ultimately ending up in China. In 2016 a review of this methodology was undertaken, and it was determined that in recent years direct imports to the Chinese mainland have become increasingly common. by 2013-14, China eased restrictions on the direct importation of gold to ports outside of Hong Kong, and as a result users have abandoned using Hong Kong gold imports as an appropriate proxy measure for Chinese imports. The ABS implemented improvements to more accurately reflect the country of final destination of gold bullion, non-monetary (excl. unwrought forms and coins of HS 7118 and HS 9705) (AHECC 71081324) exported to Hong Kong and China in August 2016. The series were revised back to January 2012, inclusive. This impacted the country series only, as published in tables 14a and 36a-36j of International Trade in Goods and Services, Australia (cat. no. 5368.0) and detailed country statistics available on request. Total levels were not impacted, nor will there be any implications for other ABS collections. The ABS defines the country of final destination for exports as 'the last country, as far as it is known at the time of exportation, to which goods are to be delivered'. The ABS conducted a review of the country of final destination of gold bullion into China and Hong Kong. There was evidence that Hong Kong had ceased serving primarily as an intermediate shipping country of gold into China and was importing and transforming gold bullion in its own right.

4) Data from Australia and the US for September hasn’t been released yet, so the numbers disclosed are provisional.


Vilfredo Pareto Fri, 11/17/2017 - 08:46 Permalink

It looks like an honest exchange with uncomplicated, efficient physical delivery at the demand of the note holder will ultimately prevail over comex and the London exchange.  Those are healthy markets with 777 tons delivered.  I suspect eventually shanghai will be the benchmark. It is interesting to look at the value of all gold compared to the value of financial paper in the world.  Its value as insurance is pretty obvious.  Something has to give if a size 12 foot ever tries to slip into a size five shoe lol

Albertarocks Fri, 11/17/2017 - 09:00 Permalink

I'm surprised at how many investors don't really understand what this means for gold.  Once the Chinese have gold they will never give it up.  Once it's in China it will stay in China for generations.  And why wouldn't they be buying it now?.. at a time when the stupidest of the stupid, the western bankers, are suppressing the price of gold and silver like their lives depended on it.The day will come when the Comex explodes under pressures of 'demand' and the price surges to $1,500, and a whole lot of people are going to be thinking "Jesus, maybe I'd better get some gold".  The next thing they'll be saying is "What do you mean there isn't any"?  Once that rocket ignites there won't be any turning it back for years.  Gold at $5,000 is an automatic.  There will be extreme demand coupled with a very scary shortage of supply.  Economics don't get much more basic than that. We will probably see a period of time when people won't be able to buy an ounce of silver at any price because even today it's already barely keeping up with relatively light demand.  What will happen to the price of silver once the panic starts?  One thing is certain, whatever amount gold rises, silver will rise at least double that percentage.  People who own silver will be extremely reluctant to part with it.

BobEore Jannn Fri, 11/17/2017 - 20:59 Permalink

Any narrative which primarily bases itself upon assumptions regarding the nature - and effects - of "supply & demand" needs be intensively fact-checked before it can be considered anything more than speculation.

The reasons for such caution are multiple - I will mention only the most trenchant ones.

There is nothing demonstrably "scientific" about "laws" invoked to explain price movement in markets. Rather than laws, as in the physical sciences, these are 'maxims' created by economists, whose attempts to emulate the observations of the hard sciences fall far short of success. As such, they represent the subjective opinions of parties for whom standard operating procedure is to start with a chosen premise ...

take, for example - Chinese are buying up all the gold in the world, and when they are done, will bang the price skyhigh! -

and then seek out selectively the data points which would support that premise. What happens inevitably is such circumstances is that some objective facts... for instance, that China is indeed buying up a lot of gold - get mixed in with a lot of unsupported suppositions drawn from that simple fact, packaged together so as to be marketed as a seamlessly unified 'fact-based' conclusion...

to those unwary - or unwilling - enough to use logical thinking, rather than emotion-based response, as their intrinsic guide in the matter.

Indeed, those who speculate on such matters as CHINA and gold demand, price action, and metal markets,etc,. - relying upon the desire of their readership for a release from the effects of their own mistaken market calls and geopolitical interpretations - can find no shortage of those willing to take their fine-woven narratives at face-value... no premise-checking asked for or expected!

For the rest of us however - those who do not believe that they can afford the luxury of basing personal asset allocation decisions upon emotion-based reasoning... such speculative narratives lead inevitably to a desolate echo-chamber, devoid of both profit... and in many cases, even ones original principle. Such is the price... of abandoning the 'other' original principal in any economic transaction - caveat emptor!

For years now I've encourage fellow golden-holders to begin the hard but necessary road back to solvency and success, by doing - for themselves - that essential task of premise-checking... all the more critical when those whom they rely upon for 'advice' abstain from doing such themselves!

In line with such charity work, I've oft suggested starting with Robert Blumens' magnificent deconstruction of supply/demand mythologies... and the methodological madness which inevitably stems from their employment by those for whom skewed data is a primary weapon of mass distortion. "Misunderstanding Gold Demand"

Unfortunately, I suspect that far too few have availed themselves of that opportunity, relying, like the author of the present piece, on a species of pathetic 'perma-victim' mythologizing, which substitutes commiserating mongst each other for the way the hard cruel world - of facts - has treated them,

instead of relying pon their own wits and survival instincts. For those of us who have ACTUALLY BEEN TO CHINA... and other points on the far eastern compass of 'gold-hungry' Asian itineraries, the results of poking around in search of prima facie evidence of what is really going on in the opaque world o gold are in startling contrast to the make believe fantasies of scribes eager for fame and recognition.

The choice of course, remains thine own, zheeple people. You can continue to indulge each others victim complexes, fantasies, and dependence upon 'gurus'... or join those of us who have made gold their primary tool in surviving the coming storm, by dropping all obedience to consensus trace formulas and their fomentors - in favor of a rational and thoughtful decision-making process of ones' own design.

The results of which 'alternatives' to 'alt-media' deceptions I have posted a link to already, below on this page...…

MOAR reasons to shower scorn - and pathetic downarrow concessions of defeat - upon the heads of those who made gold work for them over the past years of desolate doldrums for those who chose to listen to their gold gurus.

Nuthin like successful gold investing to breed scorn and hatred in the weird world o Goldburg huh?

button/moutons! or...if you ever tire of that routine... let the debate begin - at last!

In reply to by Jannn

eclectic syncretist sparksmass Fri, 11/17/2017 - 10:33 Permalink

It seems quite probable that the Chinese could easily blast the price higher by simply announcing their true gold reserve totals, which most would agree are substantially higher than what they currently admit. However, so long as the Chinese are getting physical gold at current prices, which are being continually manipulated relatively lower by Western Banksters in order to try and enhance the seeming legitimacy of their unbacked fiat currencies, how can one expect the Chinese to do anything but just keep accepting all the physical gold that the West is just giving away?Of course, there's an endgame out there somewhere, but I wouldn't expect the Chinese to kill the goose (Western Banksters paper fiat monkey-hammering of gold prices lower) that's giving them golden eggs.

In reply to by sparksmass

CHX13 Albertarocks Fri, 11/17/2017 - 10:35 Permalink

Only question is when. The patient stackers don't care much about the timing though and accumulate just as much as they can; in the case of China as much as they can without upsetting the current system, ensuring a continued flow of the (remaining) metal to the East. They have so many dollars, they could drop the hammer any day they wanted but choose not to do so. Gold is excellent value at a low price here; maybe pennies on the dollar post reset. Time will tell. GLTY+A.

In reply to by Albertarocks

jeff montanye CHX13 Fri, 11/17/2017 - 21:28 Permalink

the only question is when, true enough.  the answer, imo, is "when one really needs it" that is when inflation undeniably increases and the necessities of life begin to grow in price in a frightening way that can't be associated with some witless human maneuver like obamacare or acts of god like fires and hurricanes.then, when both inflation and interest rates begin to rise in a way to instill real fear in the populace, the prices of precious metals (and their miners) will overrun the petty schemes of central bankers like a tsunami.

In reply to by CHX13

Greenspazm Fri, 11/17/2017 - 09:31 Permalink

All these fancy pimped-up technicolor charts assume that the underlying raw data are correct and originate from reliable sources whose primary interest is to correctly inform the public. Sort of like the inflation figures, BLSBS data and the financial reports of large corporations.Good luck with that assumption.

BobEore Greenspazm Fri, 11/17/2017 - 10:05 Permalink

he he he... \looks like our chum "spawn" has been doing some reading n research since our last installment of "Painting Gold[charts]by Numb-ers!"/ how very very wise,

as anyone with a serious interest in getting any handle on the 'opaque world o gold' inevitably finds it necessary to start on the long road down DYODD ROAD...

WHICH ... unlike roads "to ROOTA"... or yellow-BRICS'd & Silky Roads to imaginary landscapes of Asian plentitude n prosperity... lead the careful observer to somewhat different conclusions ... from the feelgood consensus trace storyline dangled from the pens of goldenholders 'best friends!'

While chart porn is a great way to rally the troops... it's not a great way to chart the movements of shiny metals... as this particular trip thru the internet phone book, like many another before it... has proven, 'once agin.'

The many African and S American countries where Chinese SOE's are now pulling gold directly - with no attention whatsoever to kindly informing far off pundits why/how/and what are numbers... put paid to such exercises in statistical hopium. HOWEVER... I suggest we not talk AT ALL bout that... the real direction and sources of shiny moving thru the vaults of Chinese owned vaults in London Towne,

or anything else which might upset the equilibrium of our writin pal... bring about further "hate crimes," or make pleasantly somnolent discussions of '5000/10000/50000 $$ gold more difficult to conduct -

with the possible nasty consequences of a real discussion bout China and gold breaking out on these pages>>>>

hEAvEnS FOrBid!


In reply to by Greenspazm

BobEore Xploregon Fri, 11/17/2017 - 13:03 Permalink

I did ... catering to the easy comprehension of the readers...

at one point, but that left me with little to do outside of waving towards rockets revving up on tarmacs

backing up trucks to load with over-priced and over-hyped coins with ever-decreasing retail value,

modifying slinky toys into 'coiled spring' weapons of mass distraction,

and generally carrying on like an INSANE person incapable of even a moment's pause for self-reflection.

So I gave it all up for the much more difficult - but infinitely more fulfilling task of refuting fantastic storylines with gnarly facts, repealing perma-sellers bullshit theories which turned out perennially wrong,

and generally carrying on like a person with a firm grasp of where their own self-interest lies, and a better than average return on playing the gold game minus all the mistakes made by all the guys whom knew more than I ever would - bout pretty much everything.

What can i say to ya bro... except, I'm sorry!…

In reply to by Xploregon

BobEore Fri, 11/17/2017 - 10:37 Permalink

Oh my!
A downstroke...
musta been a 'keyboard error,' on the part of a thoughtful participant in our incipient 'discussion"... over-charged with enthusiasm... at the thought of a long-awaited breakthru!

BobEore Fahq Yuhaad Fri, 11/17/2017 - 13:15 Permalink

Now that's my kinda guy!

Always stress the positive dimensions of things!

Err... You must be new here.

Thanks mate - it's off to a great start! I got one gold guru to leave his led zepplin still idling on the tarmac yesterday... and run hide under da bus...…

and this one will no doubt wait for my sleep cycle to kick in, so's he can crawl out and whine about "hate crimes" n other snowflake stuff!

Truth is a beautiful thang!

In reply to by Fahq Yuhaad

Consuelo Fri, 11/17/2017 - 11:11 Permalink

  For all who tire of the graphs & charts, 'been hearing blah-blah for 10 years now', etc., ad-infinitum, the wider and more important picture goes like this: As long as trade and foreign policy with the U.S. remain relatively stable, the Chinese are content to roll like the Chinese do, i.e., don't upset the apple cart, but have things go your way...When and if those two dynamics come under stress that cannot be smoothed over with diplomacy, the Chinese will compress their long plan and all that gold will come to the fore.No need for such drastic measures now.   In fact, doing so abrubtly would be considered an act of war by the U.S.    The Chinese have no desire to acheive their goals in this manner.  

ReturnOfDaMac Fri, 11/17/2017 - 13:18 Permalink

Ok bugs, you can wake up now.  Gold still can't bust $1300.  Crimex is still in business, and crimex /London set the price, in fiat!  They set the price with unbacked shorts that are happily covered, in fiat, if delivery is "demanded" and cannot be supplied.  Miners (ex-China) sell their precious, happily, at the price these fiat exchanges (with little real metal) set. It works for everybody that is important, sorry bugs that does not  include you, so why change it?  Answer: You don't. This will continue for the rest of your natural lives.  You will not see gold "to the moon" in your lifetimes.  The Chinese simply want to get as big a stack as they can, at the cheapest prices they can, forever.  It's just that simple.  If it ain't broke, neither China nor anyone else will fix it.  Sorry to be a downer, but if you want something that will go "to the moon" better off with magical crypto or some rare paintings, these can't be controlled by goobermints, exchanges and the like.  Gold, no chance in hell.  So wake up.  Get rid of that useless "investment".  Sell rocks, buy stocks.  Get out there and BTFD if you want to get rich.

Kokulakai ReturnOfDaMac Fri, 11/17/2017 - 14:11 Permalink

the Zimbabwe stock market went up several thousand fold.

In Zim Notes.

I don't view gold as a vehicle to wealth, that is reserved for the production of goods, and services, but unlike the dollar, gold is a store of wealth.

A hedge against the failure of fiat.

JPMorgan said it best:

"Gold is money, everything else is credit"

In reply to by ReturnOfDaMac

ReturnOfDaMac Kokulakai Fri, 11/17/2017 - 14:21 Permalink

J.P. Morgan was of course, correct.  But owning companies that actually produce things is a proxy for production of goods.  If the goods the companies you own are sold globally, then you are not so restricted to the failures of one fiat vs another as your company will be paid in many currencies and your wealth will grow.Comparing Zim is apples to potatoes.  But +1 for referencing the country of my hero, and the greates central banker of all time, Gideon Gono!  Jeezus, now there was a man who knew how to print money, he had a Ph.D in CTRL-P.  Those were the days, good times, good times...

In reply to by Kokulakai

Kokulakai Fri, 11/17/2017 - 15:16 Permalink

Apples will become potatoes when US notes lose reserve status.

I, like most Americans, have never earned a foreign $ .

I have, however, produced goods, and services for which I was paid in a currency that devalues itself at a targeted rate of 2-3% annually.

The first dollar I earned is worth about 12 cents.

The sweat of my brow requires no more effort now than it did when I first toiled for pay.

The first ounce of gold I bought still weighs an ounce.

Why should the fiat currency I earned then, be worth less now?

Theft, plain and simple.

The US dollar has failed before, and I have hedged against the inevitable failures to follow.

Davidduke2000 Fri, 11/17/2017 - 19:18 Permalink

China is helping the comex players in keeping the gold down once it gets the amount it is looking for watch the gold going up in the thousands of dollars,  there is no gold on the market in large quantities. 

MaxThrust Fri, 11/17/2017 - 22:20 Permalink

I guess this author has never heard of the other major gold exporting countries like Australia, Canada and South Africa.I wonder were all the gold is coming from???