05/01/2020 No. 155
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China's Gold Rush
By Paul H. Tai
September 1, 2008

This article has also been published in July 2008 by The ELM, a monthly e-magazine.


With the rising prosperity in China in recent years, gold has been flushed to the country in ever increasing quantity.  A gold rush is on, but that's not what we are talking about here.  Instead, a different one, of a far larger quantity and taking place in a much shorter time half of a century ago, is the subject of our attention. 


In the small hours one early December day 1948, a horde of coolies filed out the vault of the Central Bank of China on the Bund in Shanghai. They carried heavy crates with their shoulder poles and sped toward a dock on the Huangpu River a short distance away.  Armed soldiers patrolled their route in an area under curfew. They unloaded the crates onto a Customs Office's ship called Hai Sing, the Sea Star, and shuffled back and forth to deliver more crates.   


A few weeks later, on January 21, 1949, the world would learn that Chiang Kai-shek was stepping down as president of the Nationalist government.  Before taking that step, he had decided to ship away from Shanghai to Taiwan the massive financial assets his government deposited with the Central Bank.  Most of these were in the form of gold bars, but other valued goods were also around.  Chiang sought to deny these goods to the Communists in the final days of the civil war.  He wanted to use them to carry on the fight in Taiwan. Thus started the largest gold rush in modern Chinese history.   


For years this story has been shrouded in mystery.  What was the total amount of assets shipped out? Where did the gold come from? Who were responsible for the shipments? Did the operations run into any troubles?  How did Taiwan make use of these valued goods?  A number of publications have dealt with some of these questions before, but a new book with a most comprehensive, up-to-date account on the subject has just been published.  Titled Huang Jin Dang An [The Archive on Gold Transfer], it is authored by Dr. Sing-Yung Wu, a physician who is a son of one of the principal Nationalist officers in charge of the shipments.   


According to this book, the total amount of gold shipping out of Shanghai was 2,760,000 to 2,960,000 taels (a tael, , weighs about 1.1 ounce).  In addition, 34,000,000 silver dollars and more than 100 million taels of silver, and $70 million of American currency were also included in the shipments. Of these, gold accounted for, by far, the largest part.   


Many people have assumed that much of this gold came from the Nationalists' compulsory collection from privately-held gold in 1948 in connection with the gold-based currencies it had introduced. The reality is more complicated.  In his research, Dr. Wu estimated the amount of such gold at 1,470,000 taels, about a half of the amount shipped out of Shanghai. Some of the remaining half apparently derived from the American economic aid to China during the Second World War.  A portion of that aid was in the form of gold, totaling 6,285,700 oz.  It was not clear, however, how much of that gold was actually delivered, and how much of the delivered amount was consumed in the Chinese-Japanese war and the civil war following that. One can only speculate that there might be a third, yet to be identified, source of gold.  


In the chaotic days of the civil war, when many Nationalist officers defected to the Communists and when widespread corruption plagued the government, Chiang had to take enormous caution to find trustworthy aides to supervise the shipments. In the end he assigned the task to three individuals.  One was Yu Hongjun (俞鴻鈞), Director of the Central Bank, who later became prime minister in Taiwan.  The second was Wu Songqing (吳嵩慶), a long-time military budget chief under Chiang-and father of the author of the book under discussion.  The third was Tang Enpo (湯恩伯), the commander defending Shanghai against the Communist attack.  


From December 1948 to the following May, when Shanghai fell to the Communists' hands, these high ranking officers engaged themselves in a massive sea and air lift of the Nationalists' assets in multiple shipments. Each of the three officers was in charge of three shipments, mostly to Taiwan, with the rest to Xiamen, Fujian, eventually re-transported to Taiwan.  Customs Office's ship, naval and commercial ships, and military aircraft were used to transport the valued goods, with a combined weight of more than 4,330 tons.  


Moving such large quantity of goods on so many shipments could not but encounter difficulties. To insure against pilferage, all shipments were made in secrecy, with most of the crews not aware of the content of the cargo they were transporting.  Yet, Communists' underground agents in Shanghai did get wind of some of the operations.  In January 1949 the crew on the Sea Star discovered the secret as the crates containing gold were accidentally smashed open.  The Communists immediately went to work on the Customs Office's employees and persuaded them to boycott further shipment. On another occasion, a gold-carrying airplane lost the power of one of its two engines on way from Xiamen to Taiwan; it nearly crashed to the sea.  In the end, all nine shipments completed their voyage, without any more accident. (In 1949 a ship named Taiping, with valuable goods and many passengers on board, perished in the sea on way from Shanghai to Taiwan.  That well-known accident apparently did not involve any of the Central Bank's gold.)  Given the scale of these operations, the completion of the mission of gold transportation was nothing but a miracle.        


The gold reaching Taiwan was deposited with the Bank of Taiwan, which used it as the reserve for the New Taiwan Dollar (NTD)-the reformed currency the Nationalists introduced after they retreated to Taiwan.  In no small measure such reserve has over the years stabilized the value of the NTD, sparing Taiwan from the rampant inflation the Nationalists suffered on the mainland.  In turn, as Dr. Wu reasoned, the stabilized NTD contributed to the rise of the Taiwan economic miracle in the 1960s and 1970s. 


In his research, Dr. Wu has consulted extensively books and newspapers published in China and foreign countries; he went to Shanghai, Taiwan, and Xiamen to visit the sites where the gold transportation had touched upon; he interviewed many individuals directly involved in the shipments; he painstakingly verified the quantities of the valued goods by comparing different sources of data; and he attached to his work a good many photographs, public and private documents, and a selected bibliography. He produced an admirable book on a subject of great historical interest with fascinating details. 


***Information of Sing Yung Wu's Chinese publication: Huang Jin Dang An (黄金檔案: 國府黄金運臺,一九四九年) by Sing Young Wu, Taipei, http://blog.pixnet.net/Shihyingblog, 2007.

Supplement and clarification written by Dr. Sing Yung Wu on Paul H. Tai's article, "China's Gold Rush": 

Table 16-1 1948 - 1949, Gold and National Treasury Owned by the Republic of China (in Unit of Million Taels)




(in Unit of a Million Taels)



National Treasury

4.50 - 4.80











National Treasury/the U.S.

5.7 million taels was shipped from the U.S. [according to U.S. State Department publication "White Paper" (8/5/49) publication]. Then Prime Minister T.V. Song took charge of the sale of 3.53 million taels to support Chinese Fa-Bi "Legal Currency" (between April 1946 to February 1947)





Acquired from Issuing Jin Yuan quan
('Gold' Currency)

The citizens were not allowed to possess gold and forced to "exchange" it at National Banks into the new Gold Currency, August to October 1948





Government and private banks and other financial institutions

Gold possessed in Central, Bank, Bank of China, Bank of Communication, Bank of Agriculture, Provincial Banks, and other financial institutions (the amount is an estimate)

Shipped to Taiwan

3.75 - 3.95


Not including the gold used in the Civil War for military purposes



Exchange for then newly issued New Taiwan Currency (NTC) and to keep inflation under control

Part of New Taiwan Currency was used to pay for military's salary and stabilize the NTC during the period of August 1949 to December 1950






Bank of Taiwan

According to the estimate of the International Money Fund (IMF) at the end of 1950, this amount was used as reserves for issuing the New Taiwan Currency

Used in the mainland of China during the Civil War



0.80 - 0.85


Use for the military and administrative purposes during the Civil War

Used between July to December 1949 (about 100 million Yin Yuan, also known as "silver dollar," among which 30 million were made in San Francisco)

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Paul H. Tai (戴鴻超), also known as Hung-chao Tai, Editor, The ELM, a monthly e-magazine; Professor of International Political Economy, Emeritus, University of Detroit Mercy; Editor, American Journal of Chinese Studies, 1996-98; published books on international political economy, land reform, Confucianism and economic development, US-China-Taiwan relations, and Chinese history, and articles in professional journals; living in Carlsbad (in San Diego area), California, USA.
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