Li Yining, one of prominent reform designers and a highly respected economics professor in Peking University, said China should increase its gold reserves appropriately, and China must take every chance to buy, especially when gold prices fall.

Prof. Li's voice should be heard simply because he was mentor and PhD advisor of the incoming premier Li Keqiang, who is actually in charge of the economy now. Undoubtedly the PBoC might secretly accumulate some gold as it announced at end-2009 that its gold holdings doubled to 33.9mn ounce from 19.3mn ounce at Dec-2002. However, China has too much cash and the world does not have enough gold, so China might have to seek for other ways to preserve its savings. One option is oil, the black gold. In the press conference yesterday, the former chief of Energy Bureau said that he encouraged China's oil companies to purchase oil when crude prices were below US$60 per barrel.