(Kitco News) – Hong Kong intends to leverage its strong position in the global gold trade to become a leading hub for the full range of services related to the yellow metal, the government said on Wednesday.
In his third policy address, John Lee, chief executive of the Hong Kong Special Administrative Region (HKSAR), announced his administration’s intention to build Hong Kong into an international gold trading center.
Lee noted that Hong Kong is already among the world's largest import and export markets for gold by volume, and said that Hong Kong's security and stability within the complex geopolitical environment makes it an attractive location for investors for gold storage, which in turn supports related activities such as gold trading, settlement, and delivery.
“This will spur development of the related industry chain, ranging from investment transactions, derivatives, insurance, storage, to trading and logistic services,” he said.
Under the plan, Lee said the Hong Kong government will promote the development of world-class gold storage facilities to streamline the storage and delivery of spot gold within Hong Kong, which will drive demand for related services such as collateral and loan businesses, which will grow new areas of the financial sector.
The HKSAR’s financial services and treasury bureaus will set up a working group to move the international gold trading center project forward. Lee said the working group’s activities will include strengthening trading mechanisms and the regulatory framework, promoting the use of cutting-edge financial technology, and working with the mainland China authorities to include gold-related products within the mutual market access program.
The international gold trading center is part of a broader initiative designed to strengthen Hong Kong's status as a global financial center. Among other measures, Hong Kong intends to deepen mutual market access and enrich offshore renminbi (RMB) business to reinforce its status as the world's largest offshore renminbi business hub.
He said Hong Kong will also endeavor to provide more RMB-denominated investment products, including seeking support from the Ministry of Finance to boost the size and frequency of issuing RMB sovereign bonds, and to launch offshore RMB sovereign bond futures as soon as possible.
Lee said the HKSAR will actively work with the mainland authorities to expand the bond programs as appropriate.
