Hong Kong sets out global gold hub as driver for commodities, yuan
Hong Kong’s plan to build a global gold hub will provide “an entry point” for trading other commodities and expanding the yuan’s usage on world markets, according to its first-ever five year plan.
The city will “fully leverage the role of gold as a strategic asset” by developing a one-stop gateway for storage, trading and clearing the precious metal, according to a document released Wednesday laying out the government’s priorities.
The plan involves building mutual access with mainland gold markets, including the Shanghai Gold Exchange and the Shanghai Futures Exchange, to increase the variety of yuan-denominated products. Hong Kong’s role in the London Metal Exchange’s global warehousing network for base metals will also help drive more commodities trading, risk management, and financing, the document said.
Hong Kong began trialing a new gold clearing system in July, marking progress in its ambition to take market share from traditional bullion centers like London. The People’s Bank of China is stockpiling more gold in the city, which is also inviting other central banks to shift their reserves.
A stronger connection between Hong Kong and the mainland is likely to help traders access the world’s biggest gold consumer. China strictly controls imports, while exports are largely prohibited.
The city “will offer all‑rounded support for more gold traders and financial institutions to establish their presence in Hong Kong,” as the government explores more “preferential policies” for the industry, the document said.
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