Chen Haolian: Hong Kong gold central clearing system preparations enter final stage, trial operation within the year.

On May 27, Chan Ho-lim, Acting Secretary for Financial Services and the Treasury of Hong Kong, stated in a written response to lawmakers' questions that the Hong Kong government is establishing the Hong Kong Gold Central Clearing System (clearing system) to provide efficient and reliable clearing services for international standard gold transactions, enhancing the reliability and efficiency of gold trading and physical delivery in Hong Kong. The Hong Kong Treasury Bureau has established the "Hong Kong Precious Metals Central Clearing System Limited Company," which is fully owned by the Hong Kong government, as the governing body of the clearing system. Board members include representatives from the Shanghai Gold Exchange, regulatory bodies, and 11 banks, to incorporate opinions from different sectors of the market. The board members have a profound understanding of the international financial markets and rich experience in the financial industry, providing valuable insights on the governance framework and rules of the clearing system in terms of operations, supervision, and risk management. Apart from the board of directors, the Hong Kong Treasury Bureau also consulted industry stakeholders on the operation of the system. The operational preparations of the clearing system have entered the final stage, and the Hong Kong Treasury Bureau plans to conduct a trial run within this year to further understand and analyze the industry's actual operational situations, ensuring that the system services are attractive and the operations are stable, encouraging more Mainland and international investors and users to choose Hong Kong as a hub for clearing and delivery. To attract more gold spot storage, clearing, and delivery in Hong Kong and establish a comprehensive gold trading ecosystem, the Hong Kong government has set clear expansion targets for storage capacity. By promoting the expansion of gold storage capacity in Hong Kong through the Airport Authority Hong Kong and financial institutions, Hong Kong aims to surpass 2,000 metric tons of storage capacity within three years and build a regional gold reserve hub. The government is also actively promoting the establishment or expansion of refining facilities for gold traders in Hong Kong. The Hong Kong Trade and Investment Promotion Agency and the Key Enterprises Division collaborate with relevant policy bureaus and departments to provide appropriate support to companies, assisting in identifying factory and storage space, and providing relevant information and guidance. Several enterprises with international standard gold refining qualifications have expressed interest in expanding into the Hong Kong market. The National "15th Five-Year Plan Outline" explicitly supports the construction of a commodity trading ecosystem in Hong Kong. With the strategic guidance of the national strategy to accelerate the development of a strong financial country, the Hong Kong government is actively leveraging Hong Kong's unique advantages under the "One Country, Two Systems" principle, using the gold market as an entry point to contribute to national strategic development. The Hong Kong Treasury Bureau has signed cooperation memorandums and agreements with the Shenzhen Local Financial Supervision Bureau and the Shanghai Gold Exchange, preparing for future interconnectedness with Mainland China, building an integrated gold ecosystem, and enhancing the international influence of the Renminbi in gold pricing and trading. The cooperation memorandum signed with Shenzhen covers support for gold traders in Hong Kong to collaborate with qualified refining enterprises in Shenzhen to explore processing and trade cooperation, refining gold for physical export to Hong Kong for trading and delivery purposes, enhancing the volume of the gold market in Hong Kong. The Hong Kong Treasury Bureau is finalizing implementation details with relevant Mainland authorities, and specific measures will be announced in due course. Simultaneously, the government is devoted to deepening cooperation with "Belt and Road" countries and other international market participants, promoting Hong Kong's gold storage, clearing, and risk management services through outward visits, events, exploring signing cooperation agreements, etc. For example, during a visit to Uzbekistan and attendance at the annual meeting of the Asian Development Bank board of Governors, the Director of the Hong Kong Treasury Bureau introduced the latest developments and opportunities in the gold market to attending finance ministers and central bank representatives. The government will also leverage the network of economic and trade offices in Mainland China and overseas to promote the direction and specific measures for developing the gold market in Hong Kong. Currently, there are no tariffs or import-export controls on passengers carrying gold products in and out of Hong Kong. The government will explore the feasibility of providing more convenient arrangements for passengers in collaboration with Mainland authorities as needed to promote the development of the gold retail market in Hong Kong.