From the story:
As for the gold, yes - several billion in gold bars never existed and yet resulted in a cascade of subsequent cash flow events allowing tens of billions in funds to be released, "benefiting" not only founder Jia, but China's broader economy.
Which is, needless to say, terrifying: because whereas just after the financial crisis China was engaged in building ghost cities, everyone knew these were a symbol of demand that would never materialize, even if the cities themselves did exist.
...It now appears that a major part of China's subsequent economic boom has been predicated on tens of billions in hard assets - such as gold - which simply do not exist.
The upshot: Fake gold was to fund the creation of Ghost Cities where nobody lives!
Thanks. Fake gold as collateral to build fake ghost cities. The Chinese have a strain of degenerate gambling. Las Vegas has catered to them for ages. Vietnamese too. This why Sheldon Adelson built his casino in Macau after bribing the appropriate officials. This casino is more profitable than his Las Vegas ones
With these billions in fake gold being exposed to the light of day. This means the supply of real actual physical gold has shrunk. My guess is 1-2%. Thus the gold price today is up at 1,798.60. Which I have not seen so high since 2011 or so when Ubungu was President..
$1929 in August 2011 was the last significant gold high