China’s aggressive buying of commodities has raised concerns among analysts about the possibility of the country resorting to the “economic nuclear option.”

Speculation abounds regarding whether China is preparing for a significant devaluation of its currency, the yuan.

Such a move could stimulate exports but would also trigger global economic repercussions and exacerbate trade tensions with the United States.

China’s recent accumulation of resources like gold and oil suggests a strategy to bolster financial security and bargaining power in the event of a currency devaluation.

The country’s central bank’s continuous gold purchases and increased crude oil imports indicate efforts to diversify assets and mitigate risks amid geopolitical tensions, Newsweek has reported.

Economists attribute China’s gold purchases to a desire to reduce reliance on Western currencies, while private sector holdings of gold are seen as a response to domestic policy risks.

China’s substantial increase in crude oil imports, already the world’s largest, reflects both increased demand following pandemic restrictions and ongoing strategic resource accumulation.

Written by B.C. Begley