(Kitco News) – China continues to ratchet up efforts to leverage Hong Kong to expand its already dominant influence over the global gold market, as the Asian giant is building up market infrastructure to woo foreign investors, while mainland mining companies tap the semiautonomous region’s stock market to fund their own overseas expansion.
According to a recent report from Nikkei Asia, the Hong Kong government has now established Hong Kong Precious Metals Central Clearing, a fully state-owned company that will start operating on a trial basis before the end of 2026. “The government also aims to expand the territory’s gold storage facilities to more than 2,000 metric tons within three years,” the report said. “It plans to work more closely with the Shanghai Gold Exchange as well.”
While China is the world’s largest producer and consumer of gold, international prices are still determined far from its shored by the London bullion market and the New York futures market, in part because China lacks the necessary infrastructure. Chinese authorities are working hard to change this.
The planned market infrastructure will pave the way for mainland investors to trade and store gold in Hong Kong – and the new hub would then be in a position to draw in overseas investors. “If Hong Kong becomes established as a bullion market, Asian countries will save on transport and logistics costs compared with handling delivery in London,” the report noted.
Mainland China’s gold miners are also expanding overseas, with Zijin Gold International – a division of massive state-owned player Zijin Mining Group – announcing plans in January to acquire Canada’s Allied Gold for around $4 billion, which would give it stakes in gold projects in Ethiopia and Mali.
This overseas expansion is being financed through the Hong Kong stock market. “Zijin Gold raised about HKD 28 billion (USD 3.6 billion) through an IPO last September,” the report said, while Chifeng Jilong Gold Mining – China’s largest private gold mining company – is now listed in Hong Kong to capitalize mines in Laos and Ghana.
Gold mining stocks have also outperformed the broader Hong Kong market over the last two years. “Zijin Mining shot up roughly 150% in 2025, then jumped about 26% from the end of 2025 to February 23, beating the benchmark Hang Seng Index, which rose about 28% in 2025 and 6% from year’s end to February 23,” the report said. “Chifeng Gold climbed 34% from the end of 2025 to February 23.”
All of the activity is creating a positive feedback loop, strengthening public and private Chinese miners while building up Hong Kong as a global gold hub over the medium term. “The Chinese government’s vision of making Hong Kong a gold trading hub is boosting these companies’ shares,” the report noted. “Higher stock prices can, in turn, enable them to raise more growth capital from the market to boost their expansion abroad.”
Koichiro Kamei, head of Japan’s Market Strategy Institute, said that geopolitics is also playing a role in these coordinated public and private sector efforts to acquire gold-mining rights while also bringing more of the world’s gold trade to China.
“Emerging countries saw how Western countries froze Russia’s assets after its invasion of Ukraine and have been moving to keep their gold within their own borders,” he said.
In late February, Hong Kong officials announced that they were intensifying their coordinated efforts to become an international gold trading center, supporting China’s broader ambition to cement its influence over global bullion markets amid a shifting geopolitical landscape and record-high prices.
Joseph Chan Ho-lim, Hong Kong’s Undersecretary for Financial Services and the Treasury, announced at the first gold trading session of the new Year of the Horse that the government intends to make a “full push” to transform the city into a regional gold storage and trading hub.
“We will expand the country’s market share and influence on prices in the international gold market,” he said.
The plan includes the expansion of Hong Kong’s gold storage capacity to more than 2,000 metric tonnes within the next three years, incentivizing bullion dealers to establish or enlarge refining facilities in the city, and strengthening cross-border cooperation with mainland authorities in the bullion sector.
Among the cornerstones of the initiative is the imminent launch of a fully state-owned gold clearing system, which is slated to begin trial operations later this year. The platform is designed to provide the clearing and settlement services necessary to position Hong Kong as a credible alternative bullion marketplace to Western hubs like London.
Local authorities are also seeking closer alignment between the Shanghai Gold Exchange and Hong Kong’s own gold market, which will also serve to deepen the financial integration between the mainland and the Special Administrative Region.
And, in a move to enhance regulatory coordination and liquidity flows between Hong Kong and the coastal mainland, the Hong Kong government has signed a memorandum of cooperation with the Shenzhen Municipal Financial Regulatory Bureau to support local gold dealers.
Chan said that the broader objective is to expand China’s market share and influence over international gold pricing, which have historically been controlled by Western financial centers.
In late 2024, Hong Kong’s chief executive first announced their intention to become a leading hub of the global gold trade.
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.
And late last year, several Asian nations expressed interest in storing their sovereign gold with the Shanghai Gold Exchange (SGE) as it expands its vaults offshore.
According to a report from Bloomberg, Cambodia’s central bank is expected to be among the first countries to store part of its gold reserves in SGE vaults located in Shenzhen’s bonded zone. The report also noted that other unnamed central banks have expressed interest in storing their gold with China.
Cambodia’s central bank holds about 54 tons of gold, representing roughly 25% of its $26 billion in foreign exchange reserves, according to data from the World Gold Council.
Cambodia’s plan to relocate some of its gold holdings is not a major surprise, as China is a key economic ally. Through its Belt and Road Initiative, Chinese firms have helped finance and construct much of Cambodia’s infrastructure in recent years — from a new airport in the capital, Phnom Penh, to expressways and canals.
China also holds roughly one-third of Cambodia’s debt, and trade between the two countries rose to a record $15 billion in 2024.
Analysts note that China is looking to capitalize on the growing trend of deglobalization as the U.S. increasingly weaponizes the dollar and its economy. At the same time, a growing number of nations have repatriated their gold from international hubs like London to hold within their own borders.
China’s push to attract official gold reserves is just one component of its broader strategy to reshape the global gold market, along with the SGE’s plans to expand its network of offshore vaults in Hong Kong, helping raise the profile of its yuan-denominated precious metals products beyond mainland China.
