(Kitco News) – Gold is a “strategic mineral” to the Chinese government and plays a central role not only in the country’s long-term economic policies, but also in its national security strategy – and the international “Gold Road” initiative is a central component in all of this, according to a new analysis from S&P Global.
The in-depth report – which offers a comprehensive analysis of every area of China’s gold market including regulation, consumer demand, mining and production, and the central bank – also explores the ways that China is leveraging its international relationships to place gold at the center of its economic and defense planning.
The authors of the report explain that while China’s globalization strategy was interrupted by COVID, it has since been revived with “a renewed focus on gold that will likely drive Chinese efforts for years to come.”
“The globalization drive slowed during the pandemic, but it resumed with greater urgency in 2022,” they wrote. “That year, Western sanctions froze Russia’s foreign exchange reserves due to the Russia-Ukraine war. This raised concerns among policymakers in China and elevated the importance of gold as a potential way to address such risks. As a result of this and other ensuing events, national security objectives such as improving economic resilience and reducing foreign reliance were elevated to become central organizing principles behind China’s policies.”
“While some see the economic advantages of trading gold in yuan or holding gold as reserves as debatable for China, this implies that such considerations will likely be outranked by the new security objectives.”
The authors noted that the PBOC resumed its gold-buying spree in late 2022, while the Shanghai Gold Exchange (SGE) also recommitted to the 2019 ‘Gold Road’ initiative.
“The Gold Road (also reported as ‘Gold Corridor’) aims to promote yuan-based gold trading and settlement globally,” they said. “Driven by China’s long-term aims such as broadening yuan-use, improving resilience, and reducing reliance on the US dollar, the initiative will likely see gradual progress but continued commitment.”
The Gold Road targets countries that are members of BRICS and the Belt and Road program, and it also ties into Beijing’s trade and diplomatic efforts across the Global South.
“The Gold Road’s latest initiative aims to establish a global network of gold vaults that supports gold trading in yuan and yuan conversion into gold stored in the vaults,” the authors write. “As more such vaults open in partner countries, they would form a multilateral network for yuan-based gold trading, conversion, and custody outside the US dollar.”
The first of these offshore vaults was established in Hong Kong in 2025, paired with two yuan-based gold contracts that settle in the Chinese currency or physical gold delivery, including to the new vault.
“Other potential locations reportedly include regional gold trading hubs such as Singapore, Kuala Lumpur, Dubai, Riyadh, Moscow, and others,” they said. “The network offers connectivity to the world’s largest physical gold market. It could also attract countries looking to diversify, onshore, or nearshore their gold storage to enhance control.”
“While it remains unclear how future vaults will be built, operated, and received in partner countries, we expect the first vault in Hong Kong to serve as a model.”
The Hong Kong International Airport Precious Metals Depository is the SGE’s first offshore vault. “Owned and certified by the SGE and operated by the Bank of China (Hong Kong) Ltd., the vault has 150 tonnes of initial capacity,” the authors wrote. “Hong Kong plans to expand the city’s gold storage capacity tenfold to over 2,000 tonnes in three years to create a ‘regional gold stockpiling hub.’ This amounts to just shy of China’s entire gold reserves, nearly a third of the vaulted gold at the Federal Reserve Bank of New York, or 40% of that at the Bank of England in London.”
The Hong Kong depository operates on the SGE’s management regime and is supported by a centralized clearing system for gold trading which was trial launched on July 7, 2026,
“We expect China to pursue these and other plans for gold as tensions and conflicts continue to arise around the world,” S&P Global wrote of China’s many gold initiatives, including the ‘Gold Road’ strategy. “These plans incorporate past policy goals as well as new security considerations.”
“In the uncertain world ahead, one certainty may be that China’s role in the global gold markets will grow further as these efforts unfold.”
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