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Australia Customs Department Confirms BullionStar’s Analysis on Gold Export to China

by Koos Jansen, Bullion Star:

Since 2015 I’ve stated the raw data published by the Australian Bureau of Statistics (ABS) on gold export to China mainland do not accurately reflect what is imported by China from the land of down under. In my previous post I’ve written Australia’s gold “export to China” should be adjusted by Hong Kong’s gold “import from Australia” as a substantial amount of gold Australia declares to export to China is in fact travelling through Hong Kong. A written statement from ABS now supports this analysis.

Obviously, what we’re after is exactly how much (non-monetary) gold China is importing from all countries around the world. As China doesn’t disclose its cross-border trade statistics for gold, the only way to reach our objective is by establishing net gold export from all countries around the world to China, subsequently to aggregate these numbers and come to an estimate of total Chinese gold import.

One of the largest exporters of gold to China is Australia, but calculating Australia’s gold export to China is complicated, as we need to be cautious to avoid double counting in computing China’s total net gold import. The thing is, ABS bluntly alters any “export to Hong Kong” into “export to China” when they suspect the gold is shipped to Hong Kong but will reach the mainland as its final destination – this is what ABS confirmed to me. Therefor, from using Australia’s “export to China” double counting can arise when any gold flowing from Australia via Hong Kong to China would then be declared as “export to China” by Australia and “export to China” by Hong Kong.

Let us clarify this subject. Have a look at the chart below. If we focus on the period from January 2013 until December 2014 we can observe that Australia’s “export to China” (purple bars, data sourced via ABS/COMTRADE) roughly matches Hong Kong’s “import from Australia” (turquoise bars, data sourced from the Hong Kong Census and Statistics Department). We must conclude that over this period roughly all gold Australia exported to China was transferred via Hong Kong. If we then would sum up Australia’s gold “export to China” to Hong Kong’s gold “export to China” this would result in double counting.

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