Hong Kong plans to formalize a brand new hyperlink with the Shanghai Gold Alternate by a memorandum of understanding that will likely be signed on the Asian Monetary Discussion board subsequent week, in keeping with Monetary Secretary Paul Chan in a weblog publish printed on Sunday.
Paul stated he was leaving for Davos to attend the World Financial Discussion board, the place about 3,000 political and enterprise leaders from greater than 100 nations will meet to speak about world dangers. He stated he would maintain conferences, ship speeches, and promote Hong Kong’s place beneath China’s upcoming fifteenth 5-12 months Plan.
Gold clearing plans goal sooner trades and decrease prices
Paul stated Hong Kong wants to maneuver sooner in a worldwide setting that’s altering by the month. Underneath the One Nation, Two Techniques framework, the town performs the position of a connector and worth builder, particularly as world commerce guidelines change.
One space the federal government needs to push more durable is gold buying and selling, with the purpose of constructing an worldwide gold hub.
He stated demand for gold has grown as buyers look past US greenback belongings. Gold costs jumped greater than 60% in 2025, the largest annual achieve since 1979.
By the third quarter of final yr, world gold demand by worth rose 44% yr on yr to $146 billion. Paul added that Asia now wants extra dependable platforms for storing, buying and selling, clearing, and pricing gold.
Gold buying and selling exercise inside Hong Kong has already picked up. By November, common each day turnover of 99 tael gold on the native trade climbed greater than two instances from a yr earlier to HK$2.9 billion.
Paul stated the expansion uncovered a weak point. Throughout-the-counter spot trades nonetheless depend on direct settlement between consumers and sellers. There is no such thing as a central clearing, which slows trades and raises dangers.
The federal government is now pushing to construct a central gold clearing system as core monetary infrastructure. Paul stated the system goals to boost effectivity, enhance bodily supply, lower transaction prices, and add liquidity. A trial run is deliberate throughout the yr, and the Shanghai Gold Alternate has been invited to participate.
The memorandum to be signed on the Asian Monetary Discussion board will even embrace new particulars on strengthening this clearing system and getting ready for future market hyperlinks with the mainland.
Commerce digitization helps wider finance and logistics overhaul
Paul stated geopolitical tensions should not solely altering asset allocation. They’re additionally reshaping world commerce, provide chains, and enterprise fashions. Hong Kong plans to improve its complete commerce ecosystem to guard its position as a world commerce heart.
The federal government is supporting mainland companies increasing abroad whereas additionally rushing up digital upgrades throughout logistics and commerce finance at dwelling.
One mission is the Port Neighborhood System, which launched final week. The platform now connects greater than 2,300 firms. It makes use of synthetic intelligence and blockchain to supply real-time cargo monitoring across the clock. The system is designed to enhance transparency throughout the logistics chain and make commerce information simpler to make use of for financing.
One other effort is the CargoX mission, led by the federal government and the Financial Authority with different companies. The mission makes use of cargo, logistics, and commerce information to simplify commerce finance processes and assist small and medium-sized companies entry funding.
A brand new roadmap will likely be launched this week. It can give attention to information, infrastructure, and connectivity, with 20 proposals geared toward constructing a extra digital and aggressive commerce finance ecosystem.
Paul stated Hong Kong will hold its open-market insurance policies no matter no matter, including that public session on the subsequent price range is beneath method, protecting business development, job creation, public companies, and dwelling requirements. He stated policymakers should stability these targets towards world political dangers, native financial transition pressures, and the necessity to management public spending development.
Hong Kong can also be positioning itself as a regional treasured metals hub and as a bridge to mainland markets. Worldwide clearing is seen as key as a result of it lets buyers commerce gold with out bodily transferring it.
Bloomberg Information reported in October that the Shanghai Gold Alternate was already in superior talks with Hong Kong officers on becoming a member of a world clearing system.
Gary Ng Cheuk-yan, a senior economist at Natixis Company and Funding Financial institution, stated cooperation with Shanghai might strengthen Hong Kong’s position by increasing yuan-based merchandise and attracting abroad buyers.
“With improved storage and clearing techniques, Hong Kong can present a regulated, protected setting to develop the gold buying and selling ecosystem,” Gary stated. “Hong Kong can leverage its multicurrency choices – together with the Hong Kong greenback, US greenback and yuan – to construct the mandatory storage and clearing infrastructure, finally attracting buyers to commerce throughout the Asian time zone.”
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