China sets up "largest" gold fund for nations along Silk Road

BEIJING: China, the world's biggest gold producer, has set up a gold sector fund involving countries along the ancient Silk Road which is expected to raise $16.1 billion.

The fund, led by Shanghai Gold Exchange (SGE), is expected to raise an estimated 100 billion yuan ($16.1 billion) in three phases, state-run Xinhua news agency reported. It is said to be the "largest fund" set up by China.

The fund has been set up in northwest Xi'an city during an ongoing forum on investment and trade.

China is the world's largest gold producer, and also a major importer and consumer of gold.

Among the 65 countries along the routes of the Silk Road Economic Belt and the 21st-Century Maritime Silk Road, there are numerous Asian countries identified as important reserve bases and consumers of gold.

About 60 countries have invested in the fund, which will in turn facilitate gold purchase for the central banks of member states to increase their holdings of the precious metal, the report said.

"China does not have a big say in gold pricing because it accounts for a small share of international gold trade," Tang Xisheng of the Industrial Fund Management Co said.

"Therefore, the Chinese government seeks to increase the influence of RMB in gold pricing by opening the domestic gold market to international investors," he added.

According to Tang, the fund will invest in gold mining in countries along the Silk Road, which will increase exploration in countries such as Afghanistan and Kazakhstan.