Major Chinese banks restrict their customers’ ability to buy physical gold.Restrictions have been imposed on the purchase of precious metals, with a focus on gold.The Chinese central bank has not yet given an official explanation.
Several major banks, including the Industrial and Commercial Bank of China and China Construction Bank, have recently raised the risk ratings of their precious metal products. Physical gold in particular has started to be classified as a higher risk, according to the state-owned Chinese newspaper Yicai.
Banks have reportedly stopped opening new accounts for gold products and existing customers can no longer increase their holdings, only close their accounts. According to an insider in the Chinese banking sector spoken to by Yicai, customers are regularly asked to refrain from investing in gold.
Recently, the largest-ever gold find was discovered in China’s Hunan province, with an estimated amount of over 1,000 tons of gold. China is the world’s largest gold producer, with its annual production volume of 368.3 tons representing 11% of global production. In addition, China is one of the world’s largest consumers of gold.
The Chinese central bank, the People’s Bank of China, has not yet given an official explanation for the new restrictions. According to the insider, banks are raising the risk rating in order to protect less experienced and risk-prone retail investors from potential losses. Some banks are also making individual risk tolerance assessments.
We don’t have a billionaire owner, and our unique reader-funded model keeps us free from political or corporate influence. This means we can fearlessly report the facts and shine a light on the misdeeds of those in power.
Consider a donation to keep our independent journalism running…
Larry Fink predicts that Bitcoin could reach a value of $700,000 if institutional investors allocate between two and five percent of their portfolios to the cryptocurrency.
Bitcoin has experienced a sharp increase in value in recent months. In 2024, its value rose by 121 percent, reaching a peak of $108,135 in December. On Monday, after Donald Trump was inaugurated as president of the United States, the cryptocurrency reached a record high of $109,225.
In an interview with Bloomberg in Davos on Wednesday, Fink said he is “a big believer” of the world’s largest cryptocurrency as an instrument, highlighting its potential.
– If you’re frightened of the debasement of your currency, or you’re frightened of the economic or political stability of your country, you can have an internationally based instrument called Bitcoin that will overcome those local fears, Fink said.
Managing thousands of billions
Fink has previously shown little interest in cryptocurrency, telling Bloomberg in 2018, for example, that BlackRock’s clients had zero interest in crypto. Last year, however, BlackRock launched Bitcoin Trust and Ethereum Trust, exchange-traded funds that invest directly in the two cryptocurrencies. Now Fink believes bitcoin could reach a value of $700,000.
– I was with a sovereign-wealth fund during this week, and there was a conversation, should we have a 2% allocation? Should we have a 5% allocation? If everybody adopted that conversation, it would be $500,000, $600,000, $700,000 for bitcoin.
With assets of approximately $11.5 trillion, BlackRock wields significant influence over the market. Fink’s comments can thus be seen as a signal to both institutional and private investors about the future potential of cryptocurrency.
Since its creation in 2009, Bitcoin has enabled people to send and receive money online without having to rely on banks or governments. The price is mainly influenced by market supply and demand, competing cryptocurrencies, availability and investor attitudes.
China has achieved its stated goal of 5% growth for 2024, despite reported challenges such as falling government bond yields and weak domestic demand.
Donald Trump’s planned new tariffs are described as a significant risk to the country’s export-dependent economy by BNP Paribas economist Jacqueline Rong, while Hong Kong-based analyst Louis-Vincent Gave argues that China’s resilience is underestimated in international coverage.
China has reached its target of 5% GDP growth for 2024, according to the country’s official statistics agency. This is despite several reported challenges, including falling interest rates on Chinese government securities and weak domestic demand. International media coverage has often emphasized these signals as signs of an emerging crisis.
Jacqueline Ron, China economist at BNP Paribas, points out that the planned new tariffs by former US President Donald Trump pose a particular threat to China’s export-dependent economy.
– The biggest problem this year will be the US tariffs, Ron told Bloomberg.
Meanwhile, China is grappling with a still-challenging real estate market and fierce competition in the global market, which has contributed to some uncertainty about the country’s economic future.
Hong Kong-based analyst critical of “crisis narrative”
At the same time, there are voices among experts against interpreting the economic situation as a crisis. Hong Kong-based analyst Louis-Vincent Gave argues that falling yields on Chinese government securities are not a sign of economic collapse but rather part of a broader global trend.
– Historically, when emerging markets collapse, bond yields tend to go up, not down.I do not believe in the narrative of a Chinese implosion.Moreover, if we did, we would see a stock market collapse, which is not happening, says Gave.
He also speculates that the falling rates could be the result of policy decisions in China in response to Trump’s tariff threats.
– I’m not saying that’s what happened, but if Chinese institutions were instructed to sell US bonds in response to political tensions, we would see just that: falling Chinese bond yields and rising US ones, he explains.
Gave also points to some positive indicators that are often overlooked in international coverage, highlighting that China’s stock market outperformed the US last year and that the country’s economy has also made progress in strategic sectors such as electric car manufacturing.
– If China really imploded, Chinese stocks would collapse.And they are not, he says.
Chinese companies are showing interest in buying up Volkswagen’s factories in Germany, a strategic move that could potentially transform the automotive industry in Europe. The investments would strengthen China’s presence in European vehicle production, but also raise concerns about the future of the industry and political reactions.
Volkswagen plans to close its factories in Dresden and Osnabrück by 2027 – as part of the company’s fight to cut costs and face stiffening competition from Chinese electric car makers.
Volkswagen might consider selling the Osnabrück factory to a Chinese buyer, according to a person familiar with the company’s deliberations who spoke to Reuters.
However, a Volkswagen spokesperson emphasizes that “We are committed to finding a continued use for the site. The goal must be a viable solution that takes into account the interests of the company and employees”.
Could bypass car tariffs
Chinese investment in Germany has in the past included sectors such as telecommunications and robotics, but establishment in traditional car manufacturing has so far failed to materialize.
The Chinese are interested in car manufacturing in Europe in general, potentially avoiding EU tariffs on imported electric cars and strengthening their market presence, as several manufacturers have already done. For example, BYD is building plants in Hungary and Turkey, while Chery plans to start manufacturing at a former Nissan plant in Spain. Leapmotor has also considered using a factory in Germany for its production.
Reuters also reports that a source close to the Chinese government said that Chinese companies are actively exploring opportunities to buy factories that Volkswagen plans to close.
Volkswagen’s crown jewel: Wolfsburg Volkswagen Plant. Photo: High Contrast/CC BY 2.0
A spokesman for China’s Foreign Ministry urged Germany to welcome Chinese investment.
– China has introduced a series of opening-up measures to create new business opportunities for foreign companies … It is hoped that the German side will also uphold an open mind, (and) provide a fair, just and non-discriminatory business environment for Chinese firms to invest.
Opposition from German trade unions
However, a sale of Volkswagen’s plants to Chinese operators could face opposition from German trade unions, which have significant influence and may demand guarantees on jobs and factory locations.
Moreover, relations between Germany and China have become increasingly strained in recent years and, in light of the upcoming German elections, the decision-making process on Chinese investment currently appears somewhat uncertain.
However, selling factories to Chinese companies could prove to be financially beneficial for Volkswagen. According to an anonymous source, a sale could generate revenues of between €100 million and €300 million per plant.
At the same time, it also carries the risk of German car brands losing their historical edge and competitiveness in Germany, which is the largest national car market in Europe.
Volkswagen was founded in 1937 in Germany on the initiative of then Chancellor Adolf Hitler, as part of a drive for a people's car for all. After World War II, the company recovered to become a global automotive player, known for iconic models such as the Volkswagen Type 1 (the "Beetle"). Today, Volkswagen is one of the world's largest car manufacturers, owning brands such as Audi, Porsche and Skoda.
Despite EU sanctions and stated ambitions to sharply reduce imports of Russian fossil fuels, Europe still imported record amounts of liquefied natural gas (LNG) from Russia in 2024.
According to experts, there is a logical reason for the increase – Russian gas is simply much cheaper than its competitors.
Data from Rystad Energy shows that 17.8 million tons of Russian LNG were delivered to European ports last year, an increase of over 2 million tons compared to the previous year.
Despite a significant drop in piped gas imports from Russia due to the conflict in Ukraine and the terrorist attack on the Nord Stream pipelines in September 2022, the EU continued to purchase record amounts of the country’s LNG. This has been possible as the chilled fuel has been only partially covered by the sanctions imposed by Union member states.
The energy analyst firm released the data shortly after Ukraine halted the transit of Russian gas through its territory to the EU. Kiev opted to scrap a five-year transit agreement with Russian energy giant Gazprom at the end of 2024, halting the flow of natural gas from Russia to Romania, Poland, Hungary, Slovakia, Austria, Italy and Moldova.
Russian LNG deliveries to the EU not only increased but reached “record levels”, according to Jan-Eric Fahnrich, gas analyst at Rystad Energy. He states that Russia surpassed Qatar as the bloc’s second-largest supplier of LNG in 2024, after the United States.
According to Fahnrich, the EU bought 49.5 billion cubic meters of Russian gas through pipelines last year, and another 24.2 billion cubic meters of LNG, some of which was re-exported to other countries.
“Fairly simple”
Data from the Center for Research on Energy and Clean Air (Crea) show slightly lower figures, but even these reflect an overall trend of sharply increasing Russian LNG exports. According to Crea, EU imports of Russian LNG increased by 14% year-on-year in 2024 to 17.5 million tons and were worth €7.32 billion.
– The reason for the rise is fairly simple. Russian LNG is offered at a discount to alternative suppliers. With no sanctions imposed on the commodity, companies are operating in their own self-interest and buying increasing quantities of gas from the cheapest supplier, explains Crea’s Russia analyst Vaibhav Raghunandan.
The latest estimates significantly outpace recent projections by Bloomberg, which earlier this week said LNG deliveries from Russia to the EU had risen to 15.5 million tons by 2024 compared to 2020, when the EU imported about 10.5 million tons of the fuel.
