The yuan is not well established internationally yet, so as an incentive, China will offer its exporters the option to convert their yuan into gold. This will essentially result in a new source of gold demand, one not currently present in the market.
That is an interesting development.
The yuan isn't well established due to a lack of trust in china. There are entire ghost cities in china that are built for no reason other than to artificially inflate china's GDP numbers. Chinese regulators ban bitcoin exchanges one day and reinstate them the next. There's no reliable consistency or methodology behind the actions chinese take in regard to how they manage their finances or economy. There have always been concerns of china imploding due to the sheer amount of corruption & inefficiency exhibited by the state, which will be flexed as the size of china's middle class grows and average wages and living conditions increase. These factors lead to the yuan not being viewed as being reliable or having much value.
To introduce a gold standard however, where the yuan can be exchanged for gold, could be a shrewd move on china's part. It might also be a desperation move made to counteract a lack of demand in precious metals which may be reaching a peak with the unveiling of crypto. With these types of policies implementation and details can be all important. The specific terms of exchanging yuan for gold will matter. There's a chance they could place a cap on the maximum exchange amount. And then stack a big tax on top of it. What on the surface seems like a good idea could easily turn into less than what people expected it to be.
