Will The Renminbi Be Fully Convertible In 2015?
By: Koos Jansen
GoldSeek.com
Sunday, 31 May 2015
My best estimate is, China mainland wholesale gold demand was 933 tonnes (945.7 tonnes minus 12.9 tonnes) on May 22, 2015. How was this supplied? In 2013 the SGE was supplied by 11 % scrap (recycled gold) and in 2014 by 19 % scrap (2014 percentage is an estimate). Let’s use 15 % for 2015. If we subtract 15 % (scrap year to date) from 934 tonnes, and then another 174 tonnes (mining year to date), we get 620 tonnes that have been imported into the mainland.
Speculation: as these estimated imports are relatively high to what we see being exported to the mainland from places like Hong Kong and Switzerland, my guess is Chinese import was actually a little less, and SGEI withdrawals – that were not imported into the mainland – have actually been a little more. I hope to finally get confirmation from the SGE anytime soon.
By the way, Yahoo Finance has recently started publishing SGE withdrawals. That’s almost two years after me, but I’m glad they do.
Full Renminbi Convertibility
When the renminbi is said to be “fully convertible” it means that China has opened up its capital account. This would, for example, allow Chinese citizens to invest their capital overseas in stocks and bonds and alike. This is what the Chinese government is slowly achieving. The Shanghai International Gold Exchange can, inter alia, be seen as a tool to gradually allow onshore renminbi to be traded abroad and offshore renminbi in the mainland.
Friday morning I called the SGE to ask about the current status regarding the use of onshore renminbi for SGEI (/International Board) contracts. Since September 2014 international traders can use offshore renminbi to trade all contracts on the International Board and most contracts on the Main Board (they can only withdraw from International Board contracts). Domestic traders can trade all Main Board contracts and all International Board contracts. However, Domestic traders can be SGE Members and SGE Customers, currently the former is allowed to use onshore renminbi to trade International Board contracts while the latter is not, the SGE told me. (This has not yet been communicated in black and white.)
The Rest…HERE
