China Moves from US Dollar to Other Assets Including Gold

2019-11-18 14:16

Coinspeaker
China Moves from US Dollar to Other Assets Including Gold

It seems China finally decided to cut some ties to the world’s largest reserve currency – United States dollar, at least if it’s to believe the analysts’ prognoses.

The biggest and most obvious reason is the ongoing trade war between the two countries said ANZ Research in their recent report. US delisting Chinese companies’ stocks from its market – surely hasn’t helped as well. That is why, ANZ predicts, Beijing decided to diversify its foreign exchange reserves into other currencies as well.

The report says that even though China still holds a huge percent of its FX exchange reserves to the USD, it will probably speed up the pace of diversification into other currencies. The company added that the share of the dollar in the Chinese foreign exchange reserves was said to be around 59% as of June.

As per CNBC’s report, ANZ believes that other probable currencies that will found their space in the new portfolio could include the British pound, Japanese yen, and euro.

At the same time, Beijing is slowly decreasing its holdings of US Treasurys, which it is heavily invested in before. Let’s not forget that China was the largest holder until June (when it held $1.11 trillion of US debt), when it was beaten by Japan. Allegedly, China has reduced its holdings by $88 billion in the last 14 months.

At the same time, the country went on shopping for gold and as per October reports, it had 1,957.5 tons in its reserves. That could mean the end for the price decrease of this precious asset since, at the time of writing, it was falling 0.63% selling for $1,458.47 per ounce. Just for reminder, the price decreased because of the optimism regarding the possible end of the phase one of the trade war.

Pinebridge Investment’s global economist Paul Hsiao claims that Chinese companies are also highly exposed to moves in the US dollar. He said:

“Much of that is in US dollars, which can be a problem for Chinese corporates. Diversifying its currency holdings, in a way is very much in line with the recent political moves of the Xi administration to focus on China’s trade relationships beyond just the United States. China and, more broadly, the Asian region is still highly exposed to movements in the US dollar.”

Be it as it may, another way of how China could manage that risk is by filling up its portfolio with other forms of assets so-called “shadow reserves.”

According to ANZ analysts, during recent years, China has been increasing its stakes in alternative investments, and “much of that is through several investment vehicles such as its state-owned companies and banks, as well as through funds co-managed with other countries.”

The analysts added that among those investments are also equities and issuing loans through its state-owned banks – especially for its huge Belt and Road initiatives.

China’s State Administration of Foreign Exchange (SAFE), which manages China’s foreign reserves, has four investment entities: Huaxin in Singapore, Huaou in London, Huamei in New York, and Hua’an in Hong Kong. They are allegedly connected with other offshore venues that invest in equities as well. As per the report:

“These offshore investments, called China’s shadow reserves, amounted to USD1.86 (trillion) in historical value as of June 2019.”

S&P Global Ratings’ APAC chief economist Shaun Roache said:

“The global financial system is highly U.S. dollar-centric and the larger economies, including China and the euro area, have been keen to move to a multi-polar reserve currency world. For China, this would help reduce reliance on U.S. dollar financial conditions and, over time, provide more room for the renminbi to play a larger global role.”

However, we shouldn’t forget one more important instance of the whole story. It is cryptocurrency and even though China still hasn’t revealed its own cryptocurrency (which is predicted to be done by the end of this year), in October this year, Chinese President Xi Jinping urged the country to accelerate the adoption of blockchain technologies. In the future, the country with higher technological superiority will dominate global trade and commerce.

Last week, Xinhua, a state-run newspaper in China published a front-page story praising Bitcoin as the first successful application of blockchain technology describing it as “one of the hottest topics in recent years”. Bitcoin is since then relatively flat staying around $8,600 and at the time of writing it was rising 0.14% to $8,603.

China Moves from US Dollar to Other Assets Including Gold

Similar to Notcoin - Blum - Airdrops In 2024

origin »

Dollar Online (DOLLAR) íà Currencies.ru

$ 0.0024551 (+0.00%)
Îáúåì 24H $0
Èçìåíåèÿ 24h: 0.00 %, 7d: 3.00 %
Cåãîäíÿ L: $0.0024551 - H: $0.0024551
Êàïèòàëèçàöèÿ $1.851k Rank 99999
Äîñòóïíî / Âñåãî 753.776k DOLLAR

assets china gold moves dollar past billion

assets china → Ðåçóëüòàòîâ: 126


Bitcoin, China’s CBDC may endanger United States’ position as global superpower

China’s aggressiveness in embracing blockchain technology, while also recording some interest in the world of digital assets, has grabbed the attention of the entire crypto-community. This sentiment shot throught the roof after President Xi Jinping’s comment on blockchain technology, a comment that suggested that the Asian superpower is planning to focus and invest substantially in […] The post Bitcoin, China’s CBDC may endanger United States’ position as global superpower appeared first on AMBCrypto.

2019-10-30 08:00


Ôîòî:

EU Next on Trump’s Tariff List; Will People Turn To Bitcoin?

As if there were not enough economic problems facing countries of the world at the moment without an escalating trade war imposed by the Trump administration. Not content with levying heavy import tariffs on China, the POTUS has set his sights on Europe next, so will bitcoin and same safe-haven assets grow in popularity there too? Europe Next For Trade Tariffs According to reports, the Trump administration is preparing to announce tariffs on billions of Read More The post EU Next on Trump’s Tariff List; Will People Turn To Bitcoin? appeared first on Bitcoinist.com.

2019-9-16 14:30


Hyper-Bitcoinization Is A Possibility As Central Banks Continue Stacking Gold; Driving Up The Price

Bitcoin enthusiasts and investors are looking forward to the day central banks will start stockpiling the digital asset as the hunger for hard assets increases. Central banks around the world are moving towards gold as a store of value as de-dollarization picks up pace as US wars continue with China, Iran, Russia and other sanction-able […]

2019-9-10 20:53


Ôîòî:

‘Bullish For Bitcoin’: China Bank Bailouts Spark ‘Biggest Credit Bubble In History’

Bitcoin could possible gain from economic uncertainty in China as one source describes the country’s third major bank bailout of 2019 as the world’s “biggest credit bubble. ” China Bailouts: 3 Banks, $390 Billion Taking statistics from various sources, the Twitter cryptocurrency trader and commentator known as CryptoArbitrage noted that last week’s bailout of Heng Feng bank was the third involving assets over $200 billion.

2019-8-15 15:34


Ôîòî:

Currency War Erupts as US and China Bring Out the Big Guns

What started out as a trade dispute between the world’s two largest economies is now a full-blown currency war as the U.S. and China bring their big guns to the battlefield. The impact on the global financial markets was immediate and severe, driving up safe-haven assets as ordinary people fear losing the value of their […] The post Currency War Erupts as US and China Bring Out the Big Guns appeared first on Bitcoin News.

2019-8-6 13:31


Billionaire Chamath Palihapitiya says Bitcoin Is The ‘best hedge against the traditional financial system’

The entire world is currently facing economic uncertainties following the ongoing trade wars, the most prominent one being between the United States and China. Investors are therefore seeking alternative assets to gold and the US bonds and bitcoin is gaining traction due to its capacity to maintain a fierce rally amid the harsh economic times.

2019-7-10 12:01