State Fund added China ETFs to lift sentiment during rout
According to Bloomberg, China’s sovereign wealth fund has “likely bought at least USD 43 bn of onshore exchange-traded funds in the first quarter” vs. USD 6.8 bn in the second half of 2023. The extent of the buying provides insight into the government willingness to stabilize the markets during challenging periods.
China stocks: still a long way to come back to the top...
Source: Bloomberg
Gold Trading Volume in China has exploded to 5x the average in 2023...
Source: FT, Barchart
China has quietly accumulated large quantities of gold for 17 straight months – to the tune of 72.7 MILLION ounces (about 2,250 tonnes).
Despite its rise as an economic power, China’s vast reserves are predominantly in USD, an exposure it aims to minimize. To reduce this reliance, the People’s Bank of China is diversifying by increasing its gold holdings. Since 2011, China has decreased its dollar reserves by a third, down to approximately $800 billion. Meanwhile, China’s gold reserves have skyrocketed. China’s economic strategy involves diversifying away from the US dollar, which dominates global trade and commodity pricing. Source: Katusa Research
Central banks are STOCKING UP on gold:
Since 2022, China has bought a record ~290 tonnes of gold. Last year alone, China acquired more than 225 tonnes of the metal. China's central bank increased its gold holdings for 17 straight months. In 2022 and 2023, world central banks bought 1081 and 1037 tonnes of gold, respectively. Prior to 2022, there was never a year in history with 1,000+ tonnes of central bank gold purchases. Source: The Kobeissi Letter, BofA
The YEN is COLLAPSING and Abenomics has taught us some lessons:
After years of money printing, Yen now trades to 155 against USD: -32% against USD since 2021, -50% since 2012 The Bank of Japan has been buying over half of the national debt with freshly created yen, plus a bunch of other securities. But there is a price to pay after all: the destruction of the currency: Source Wolfstreet
China’s economy in the first quarter grew faster than expected, official data released Tuesday by China’s National Bureau of Statistics showed.
Gross domestic product in the January to March period grew 5.3% compared to a year ago, faster than the 4.6% growth expected by economists polled by Reuters, and compared to the 5.2% expansion in the fourth quarter of 2023. On a quarter-on-quarter basis, China’s GDP grew 1.6% in the first quarter, compared to a Reuters poll expectations of 1.4% and a revised fourth quarter expansion of 1.2%. Beijing has set a 2024 growth target of around 5%. https://lnkd.in/eNZgs7zp Source: CNBC
The "East-West divide" in one cartoon.
China is dumping their US Treasury debt and buying hard assets. Many other countries around the world are doing the same. Source: WallStreetSilver
