Kathmandu. China has surprised the world many times with its decision. Recently, China has surprised the world by deciding on rare earth minerals and now China has implemented new rules for silver.
China’s new rule is expected to increase the price of silver. Experts have also started saying that silver will no longer be cheap. Because this new move of China can reduce the consumption of silver and increase the demand worldwide.
In fact, China is a major regulator of global silver supply. China owns a large part of the world’s silver. It mines only 13 percent but controls 60 to 70 percent of global silver in terms of processing and production.
Same rule for silver as rare earth?
Now, taking advantage of this, China has taken a big step towards silver. China has implemented silver control rules from January 1. Under this rule, no company will be allowed to export silver outside China without a government license. The decision has sparked an uproar around the world. The world is viewing this Chinese decision as akin to China’s work with rare earth minerals.
Which companies will be licensed by China?
China has imposed certain conditions for the export of silver. Only a few large government-approved companies will be allowed to export and even then government licenses will be mandatory. Obtaining a license requires meeting key criteria such as products and lines of credit. So far, only 44 companies have been given this permission.
What will be the impact of this Chinese decision?
China controls 60 to 70 percent of global silver. Therefore, as export controls are extended, the global availability of silver will decrease and demand will increase. The decision comes at a time when industrial demand for silver is growing at a rapid pace. This will lead to an increase in prices. The price of silver is close to record levels and is expected to rise further.
Why is China doing this?
For China, silver has become not only an industrial and investment asset but also a strategic asset. It can use it to secure agreements with other countries or to gain its favor. Experts believe that this is why China is increasing its control over silver. Apart from this, there is a high demand for silver domestically.
China is the world’s largest manufacturer of solar panels, electronics and electric vehicles. All of them consume a significant amount of silver. Therefore, China has increased industrial demand and increased export dominance over silver supply. As a result, it has increased its dominance in various fields worldwide.
