Yining, one of prominent reform designers and a highly respected economics
professor in Peking University, said China
should increase its gold reserves appropriately, and China must take every chance to
buy, especially when gold prices fall.
Li's voice should be heard simply because he was mentor and PhD advisor of the
incoming premier Li Keqiang, who is actually in charge of the economy now.
Undoubtedly the PBoC might secretly accumulate some gold as it announced at end-2009
that its gold holdings doubled to 33.9mn ounce from 19.3mn ounce at Dec-2002.
However, China has too much
cash and the world does not have enough gold, so China might have to seek for other
ways to preserve its savings. One option is oil, the black gold. In the press
conference yesterday, the former chief of Energy Bureau said that he encouraged
oil companies to purchase oil when crude prices were below US$60 per barrel.