From the same article I posted earlier is a summary from the Golden Economizer that might be more convincing.

"Last week’s article never intended to state that China had a NET SHORT POSITION IN SILVER. The title of the article was in question form, and the body of the article explained my theory that the Chinese have both long and offsetting short positions in silver, which may result in combined net position of zero. I stated that the Chinese were using these opposing positions, in which China may hold the same exact same number of long COMEX future contracts and short COMEX future contracts resulting in no net long or short position, AS A MECHANISM WHO’S PURPOSE IS TO ACCUMULATE SILVER METAL AND DISPOSE OF EXCESS US DOLLAR RESERVES, which are constantly accumulating in the Chinese Central Bank month after month as a result of the persistent trade deficit. The brilliance of this mechanism is that it could allow the Chinese to secretly drain physical silver metal inventory away from the COMEX without spiking the market price of silver, which would hurt their producers and exporters. They merely need to hold their long contracts to maturity and take delivery of the physical silver, while selling their short contracts before maturity for cash, and using the proceeds to buy more short contracts with maturities further into the future (roll their shorts forward for longer dated shorts). The money they lose on the shorts (paper) as the silver price gradually climbs can just be considered additional acquisition cost on the longs (silver bars).

MEANS:

We Americans have been accumulating Chinese produced goods for many years now, about four times the amount of American goods being consumed by the Chinese. We settle the difference in US dollars, a good deal for the US: we trade freshly printed paper for scarce resources and labor. The Chinese already pay for all the American goods they require by exchanging a greater quantity of their own goods, so they are constantly accumulating US dollar reserves in the Chinese Central Bank, and want to find a way to use or invest these dollars so they don’t sit idle. As these dollars continue to build up in China, the Chinese have accumulated nearly a trillion dollars worth of US Treasury bonds, and another trillion dollars worth of US Agency bonds (bonds of Fannie Mae, Freddie Mac and Ginnie Mae). All these bonds pay a below market rate of interest because they are implicitly or explicitly guaranteed by the US government, but it still amounts to more than allowing the reserve dollars to remain idle in the Chinese Central bank. "