Why did china start buying gold since 2022?
China's economy has faced many challenges in the last few years. In this, the biggest was the Covid-19 epidemic. After this epidemic, the Consumer Price Index (CPI) declined in china, which increased concerns about the economic growth rate. At such a time, when the inflation rate reached zero level, the Chinese banks and the government decided that it could be corrected only with gold. Actually, gold has always been considered a safe investment option, which is why china started emphasizing on buying gold since Covid.
Trump's trade war is also a reason
Due to the ongoing trade war between America and china, china is rapidly increasing its gold reserves. According to experts, china is buying gold to reduce its dependence on the dollar in its foreign exchange reserves. Actually, this trade war, which started during the tenure of US President donald trump, is affecting China's policies.
Trump has talked about imposing heavy tariffs on products imported from china, which has increased tensions in trade relations between the two countries. china fears that if this trade war deepens in the future, its dependence on the US dollar may harm it economically. This is why china is reducing its dollar reserves and increasing its investment in gold.
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