Within three years Hong Kong will see a new building at its international airport housing some 2,000 tonnes of gold bars worth about HK$2 trillion (US$260 billion) at today’s prices.
The super vault and its contents are part of a government plan to make Hong Kong a leading international gold trading centre. And already it’s making good progress in this direction.
Earlier in the year the Shanghai Gold Exchange (SGE) opened its first offshore delivery vault in Hong Kong and the London Metal Exchange in September approved three storage facilities in Hong Kong. China is the world’s biggest bullion consumer and the move by the SGE is seen as a step towards reducing the reliance on the US dollar and promoting the wider use of the yuan in international trade.
In his annual policy address last month, Chief Executive John Lee unveiled policies to increase the city's capacity for holding bullion and establish a central clearing system for gold to revive Hong Kong's status as a global hub for gold trading. He reiterated his ambitious plans at the British Chamber of Commerce (Britcham) summit earlier this month by inviting gold traders to set up refineries here and by supporting the creation of a local gold industry trade association.
Currently, local gold is stored in bank safe deposit boxes and in the Hong Kong International Airport Precious Metals Depository which has a capacity for 150 tonnes. The depository has been providing secure storage and physical settlement services to central banks, commodity exchanges, bullion banks, precious metal refineries and issuers of exchange-traded funds (ETFs) since 2009.
The depository, located near the airport’s cargo facilities, is expanding its capacity step by step initially to 200 tonnes and eventually it will reach its goal of 2000 tonnes by 2028, ranking it among the top 10 largest gold storage facilities in the world. The big ones, of course are the Federal Reserve Bank of New York with 6,000 tonnes and the Bank of England with 5,000 tonnes. The famed Fort Knox in Kentucky holds about 4,000 tonnes.
The international gold trading platform, CME Group has approved and licensed three warehouse facilities in Hong Kong – Brink’s Inc., Malca Amit Secure Logistics and Loomis International (HK) – for storage of kilo gold bars which can be used in settlement of CME gold kilobar futures contracts. Their storage facilities are located at the Hong Kong International Airport (HKIA), Tsuen Wan and Kwai Chung.
The Chinese Gold and Silver Exchange (CGSE), founded in 1910, is Hong Kong’s only physical gold and silver exchange, and is run by its members as a society, hence the name Chinese Gold and Silver Exchange Society. The Exchange is operated through a subsidiary company called ‘Hong Kong Precious Metals Exchange Limited’, established in 1994.
The gold industry in Hong Kong is much larger than one envisages and involves more than trading and storing but also includes processing. There are, for example, 13 CGSE accredited refineries in Hong Kong for its various deliverable contracts.
Gold refining is the process of purifying raw gold to remove impurities and separate it from other metals or materials with the goal to produce high-quality gold, often reaching 99.9 per cent or higher. This process is crucial for ensuring that gold meets the highest purity standards for various applications, including jewellery and electronic appliances.
All of the refineries are locally owned, except for one and most are accredited to produce 99 Tael Gold bars and 999.9 One Kilo bars, and a smaller subset of the refineries are accredited to produce 999.9 Five Tael bars.
Internationally, two gold refineries in Hong Kong that are also on the London Bullion Market Association (LBMA) Good Delivery List for gold: German refiner Heraeus which operates a refinery in Fanling, and Swiss refiner Metalor operating a precious metals refinery in Kwai Chung. Both have an annual gold refining capacity of 200 tonnes.
In keeping with its reputation of being the financial hub of Asia and a world player in international finance, the gold industry is poised to strengthen Hong Kong’s position in world rankings. Hong Kong is competing with established hubs like London and New York, as well as emerging markets in Singapore and Dubai. By expanding its gold storage and trading capabilities, Hong Kong is positioning itself to capture a greater share of the global gold market, especially in Asia.
Gold industry publication, BullionStar noted that the local operations of the international bullion banks, the vaults and transport providers, and the futures exchanges have all benefited from Hong Kong’s strategic position as a gateway to the Chinese Mainland and the SAR’s use by China as a gold trade entrepôt. A robust gold market would complete Hong Kong’s financial ecosystem and attract more international capital.
The Chief Executive quoted a Chinese proverb at the Britcham summit that goes, "real gold is not afraid of the melting pot", adding that the gold market is not afraid of whatever volatilities are thrown up to test us. Hong Kong is a survivor and has jumped every hurdle placed before it.
Overall, Hong Kong's pursuit of becoming a leading gold trading centre is a strategic response to global shifts and regional needs, firmly establishing its role as a vital link between international markets and the Chinese Mainland's demand.
Mark Pinkstone
** 博客文章文責自負,不代表本公司立場 **
A constant problem for Hong Kong has been its inability to project a positive image overseas. Prior to the 1997 handover the prophets of doom predicted the failure of the one country-two systems plan for the future. Some 28 years later they are still proven wrong.
But in the run-up to the handover there was a concerted plan on the part of the government to sway public opinion both locally and overseas to have faith in the future. The unseeable future was hard to sell.
But a small task force within the government’s Information Services Department (ISD), the Overseas Public Relations sub division (OPRS), worked closely with the Trade Department’s overseas offices, The Hong Kong Trade Development Council, The Hong Kong Tourist Association, Cathay Pacific Airways and other similar-minded bodies with international connections to speak with the same tongue – Hong Kong has a bright future. It was known as the “Hong Kong family” and co-ordinated at the time by trade officer Tony Miller.
OPRS fed some 300 foreign journalists based in Hong Kong at the time with daily updates on progress of the negotiations on its future under the Chinese flag and developments within the city. It also invited another 300 journalists a year to visit Hong Kong and see for themselves how the city operated and to hear the views of the city’s public and private leaders on the destiny of Hong Kong.
Running parallel to the OPRS operations which concentrated solely on journalists, ISD also had a visits section which sponsored foreign government officials and business operatives and similar progams were devised for them.
Overall, the operation was successful. At first it was hit with pessimism and doubts persisted on Hong Kong’s future. But at the end of the day, much of that pessimism had diminished, except for the hardliners seeking independence for Hong Kong or retention of the status quo.
Fast forward to 2025 and still there are doubts about Hong Kong’s future fuelled by the United States and its four eyes alliances – Canada, Australia, New Zealand and United Kingdom. The objective of the US is to weaken China’s rapid development by undermining the goose that lays the golden egg – Hong Kong.
Politicians and government officials in the US and UK continually lambast Hong Kong and China with totally false narratives carried in their national newspapers and tv networks. But rebuttals by Hong Kong officials and spokesmen for Beijing’s foreign ministry are being denied publication by the foreign media. The nationals in these western countries hear only one side of the story – their local government’s side – and are being purposely deprived of the real stories of China and Hong Kong.
Hong Kong’s Chief Executive John Lee has repeatedly called for more positive stories about Hong Kong. He even raised the issue in his latest policy address. He announced a new initiative to support local media organizations in expanding their international networks, framing it as a key part of the strategy to "tell good Hong Kong stories" to the world.
He said local media already possess established networks with domestic and international outlets, and by strengthening these connections, they can more effectively share positive narratives about the city and telling the "good and true" Hong Kong stories.
The Central government obviously shares this view and has appointed a senior editor in Beijing to the Hong Kong and Macao Liaison Office to improve the mainland/Hong Kong narratives.
The deputy editor-in-chief of China Daily in Beijing, Sun Shangwu, 56, took up his appointment in Hong Kong during the golden week holidays and according to local media “Sun will greatly enhance the liaison office’s footing in the English media world, as Beijing seeks to improve China’s narrative in Hong Kong and the world,”
The job is not an easy one. There is an abundance of good writers who write plenty of positive stories about Hong Kong. The problem is placing the stories.
The deciding factor in what appears in newspapers rests with the editor or editorial board, depending on the size of the publication. And the criteria which the editor uses rests with the political bias of the publication. In other words, the media is run by governments and politicians. They have a brotherly relationship: you scratch my back, and I’ll scratch yours.
So, it doesn’t matter how well or positive a story is written, it will not see the light of day if it Pruns contrary to the policy of the publication. It will be spiked.
At a Hong Kong British Chamber of Commerce (Britcham) summit in Hong Kong last week, the CE outlined many plans the government and private sector are doing to attract more businesses, financial institutions and mega events to Hong Kong. To illustrate his point, he said that earlier in the month the Office for Attracting Strategic Enterprises (OASES), welcomed another 18 new companies, including three of the world's top 10 pharmaceutical corporations to Hong Kong. The foreigners working and living in Hong Kong become our best ambassadors in telling the real Hong Kong story back to their homes. It is third party endorsement.
For the future, by all means continue to sponsor journalists and business leaders to Hong Kong. Increase speaking engagements to targeted audiences overseas. But the only way to get a positive reaction to Hong Kong stories is to convince the foreign governments and politicians that there is nothing wrong with Hong Kong so stop peddling negative narratives. Only then will the editors accept positive Hong Kong stories.
Unwittingly, US President Trump is helping us achieve that goal. His unpopular wishy-washy policies have turned the media and public at large against him to such an extent that his allies are now looking for more trustworthy partners – China and Hong Kong. And that is our leverage.
Mark Pinkstone
