Currently, gold is a hard currency worldwide and one of the most valuable equivalents. Many countries have substantial gold reserves, and China is no exception. However, a significant portion of China’s gold reserves is not stored in its own treasury but in the United States’ treasury. Why does China store 600 tons of gold in the US when it has its own treasury? What if the US reneges on its obligations?

Many people express concerns that the US, in an attempt to curb China’s development, has been imposing trade sanctions on China. They worry that the US might have ulterior motives regarding the 600 tons of gold stored there, and if the US reneges and doesn’t return the gold, China would suffer huge losses. Moreover, China has a vast treasury with world-class security. Why not store the gold in China for greater safety and peace of mind?

Historically, after the founding of the People’s Republic of China, relations with the Soviet Union deteriorated, and China established diplomatic ties with the US. Subsequently, economic and cultural exchanges between the two countries became very frequent, leading to much of China’s assets being located in the US. Many are unaware that the gold stored by China in the US was not transported from China but purchased locally.

The reason it is stored in the US treasury is primarily to facilitate secondary transactions and payments using gold. Naturally, this raises questions: Why not return the gold to China after purchasing it in the US? Leaving it in the US gives the US an additional leverage against China.

The main reason for storing gold in the US is to ensure adequate US dollar foreign exchange reserves for China. Currently, the three most influential economies in the world are the European Union, Asia-Pacific, and North America. A notable characteristic of these economies is that they use the US dollar for settlement.