But because Chinese total figures on imports and demand are actually obscured nobody really knows the true situation, except perhaps the Chinese government. Export of gold is not allowed so total Chinese production (as noted above at around 361 tonnes) is going somewhere. The question is, is it going into Chinese industrial, investment and jewellery demand, or is all this being catered for by the imports?

There is thus a strong suggestion that Chinese gold production is, in fact, all going into the country's gold reserves which are only reported sporadically, and the last official pronouncement on this was that reserves totalled 1054 tonnes - back in 2008 - and this was nearly double the amount previously reported five years earlier at 600 tonnes. If China is indeed putting all its domestic production into its reserves then these could now well be at 2,000 tonnes or more - but even this is still a small fraction of China's total monetary reserves and there certainly has been internal discussion in China that the proportion of gold in its reserves should be much higher.

The argument stands that China is increasing its gold reserves surreptitiously because if it were confirmed officially that it was adding say 300 tonnes or more to its reserves annually (i.e. the amount of domestic gold production) this would have a strong upward impact on the gold price and make it more expensive to add further amounts of gold, in part in place of its huge trillion dollar holdings of U.S. Treasuries. Whether this policy of not reporting its official reserves will continue will almost certainly depend on political expediency - and there's no guarantee that if they are reported at some point in the future they will be the true figure anyway. So the speculation on this will continue.

David Fuller's view Fullermoney has long maintained that the Chinese Renminbi would eventually become fully convertible, on its way to becoming an extremely important reserve currency. If correct, it would make sense for China to build up its gold reserves, which it can do more stealthily and therefore cheaply by absorbing domestic production rather than buying in the open market.