China Builds Gold Vault Network to Promote the Yuan

Submitted by Vince Lanci, GoldFix:

GFN – HONG KONG: As first reported on Goldfix in 2025, China is building a global network of gold vaults and expanding the infrastructure linking physical bullion to yuan-denominated trade, according to an S&P Global Ratings report cited by the South China Morning Post.

The strategy centers on making the renminbi more useful outside China by giving holders greater access to gold through Hong Kong and, potentially, a broader network of international vaults. S&P said the effort could strengthen the yuan’s role in cross-border trade by providing an additional form of convertibility into an asset that is widely accepted and traded globally.

“But if that renminbi is convertible to gold, then that’s a potentially different picture. Gold is tradeable. It is usable in a lot of places.”

Charles Chang, S&P Global Ratings’ Greater China country lead for corporates, said one of the persistent questions facing companies that accept renminbi is what they can ultimately do with the currency. Connecting yuan transactions more directly to gold could help address that issue.

Mainland China launched its first offshore gold delivery vault in Hong Kong last year under an agreement with the Shanghai Gold Exchange, with Bank of China (Hong Kong) serving as the designated operator. At the same time, the SGE introduced two yuan-denominated gold contracts that can be settled either through physical delivery or in cash.

S&P said China is considering extending the vault network to major gold and financial centers including Singapore, Kuala Lumpur, Dubai, Riyadh and Moscow.

“The network offers connectivity to the world’s largest physical gold market.”

Chang said the infrastructure could also appeal to governments seeking greater control over their bullion reserves by storing gold domestically or closer to home.

“It could also attract countries looking to diversify, onshore or nearshore their gold storage to enhance control.”

The initiative comes as China continues to increase its official gold reserves. Holdings reached 76.08 million ounces at the end of July, marking the 21st consecutive month of reported accumulation. S&P said China remains relatively underweight gold as a share of total reserves, leaving room for additional purchases or increased domestic production.

Beijing has also elevated gold’s strategic importance. In 2025, authorities reclassified gold from a financial asset to a “strategic mineral,” while several government agencies introduced plans aimed at strengthening the industry’s security, production capacity, technology, scale and resource base.

That policy shift is expected to benefit Chinese miners including Zijin Mining and Shandong Gold Mining, which S&P expects to expand faster than many international competitors.