The World Gold Council (WGC) recommends China to increase gold reserves to at least 5% of foreign exchange reserves in order to help diversify the country's currency risks. Roland Wang, managing director of China's WGC division, believes that currently China's gold reserves, which constitute about 1.6% of the country's gold and currency reserves, are at a low level relative to the reserves of many developed and some developing countries. "Ideally, the amount of gold in foreign exchange reserves should be at least 5%," he said.
According to the Central Bank of the country, the last time China raised its gold reserves in April 2009, when they increased to 33.89 million troy ounces (about 1054 tons) from 19.29 troy ounces, and as of December 2014 the reserves remain at the same level. According to WGC, in the fourth quarter of last year, Mexico's gold reserves accounted for 2.4% of total foreign exchange reserves, in Australia this figure was 5.7%, in India - 6.7%, and in Russia - 12.1%.
Wang said that the WGC maintains constant contacts with the Chinese authorities, the Central Bank of the country and the Chinese Gold Association. "The increase in gold reserves will increase the confidence of investors during the period when China is trying to achieve the internationalization of the renminbi," added Wang.