China Expands Global Gold Vault Network to Boost Yuan Trade Use

China is establishing a worldwide series of gold storage facilities while accelerating central-bank reserve purchases, a strategy outlined in an S&P Global Ratings report. The first offshore delivery vault opened in Hong Kong under an agreement with the Shanghai Gold Exchange (SGE), with Bank of China (Hong Kong) serving as the designated operator. The SGE has also introduced two new yuan-denominated gold contracts that may be settled by physical delivery or cash. Potential additional hubs include Singapore, Kuala Lumpur, Dubai, Riyadh and Moscow.

South China Morning Post

Beijing plans to reclassify gold from a financial asset to a “strategic mineral” beginning in 2025. The reclassification is intended to make the yuan more attractive for international trade by linking it to a tangible, globally accepted store of value.

South China Morning Post

Domestic miners such as Zijin Mining, China’s largest gold processor, and Shandong Gold Mining are projected to expand output faster than most global peers, according to the S&P Global Ratings analysis. Their accelerated production is expected to supply the growing network of vaults and support the new yuan-linked contracts.

South China Morning Post

The report suggests that the vault network could attract countries seeking diversified on-shore or near-shore gold storage, thereby enhancing control over reserves.

South China Morning Post

• “If you are trading in renminbi, there’s always a question as to how you are going to use the renminbi,” — Charles Chang, greater China country lead, corporates, at S&P Global Ratings

South China Morning Post

These elements together illustrate China’s coordinated effort to intertwine gold storage capacity with the yuan’s international role, leveraging both policy reclassification and market infrastructure to broaden the currency’s appeal in global trade.

South China Morning Post