Hong Kong and Shanghai Gold Exchanges Sign Agreement to Enhance Market Cooperation

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market

The Financial Services and the Treasury Bureau (FSTB) signed today (January 26) a co-operation agreement with the Shanghai Gold Exchange during the Asian Financial Forum, marking a new milestone in deepening co-operation between the gold markets of Hong Kong and Shanghai. The FSTB also revealed new moves in six aspects relating to the development of gold market at the same time.

Photo source: reference image

The agreement was signed by the Secretary for Financial Services and the Treasury (SFST), Mr Christopher Hui, and the Chairman of the Shanghai Gold Exchange, Mr Yu Wenjian, in the presence of the Chief Executive, Mr John Lee; the Deputy Governor of the People's Bank of China, Mr Zou Lan; Member of the Standing Committee of the Communist Party of China (CPC) Shanghai Municipal Committee and Executive Vice Mayor of the Shanghai Municipal People's Government, Mr Wu Wei; and the Executive Deputy Director of the Office of the Financial Commission of the CPC Shanghai Municipal Committee, Mr Zhou Xiaoquan.

Mr Christopher Hui, Photo source: news.gov.hk

Mr Hui also outlined the strategic significance of the agreement and the overall development blueprint for Hong Kong's gold market at the signing ceremony. He said, "Gold has long been regarded as a cornerstone of the global financial system. Its unique physical attributes, inherent scarcity, and proven safe-haven function make it irreplaceable in areas such as national reserves, asset allocation and diversification. In recent years, amid heightened geopolitical uncertainty, inflationary pressures, and ongoing restructuring of the international monetary system, the strategic importance of gold has become even more pronounced. The agreement signed by the FSTB and Shanghai Gold Exchange represents a resolute commitment to translating the spirit of the Central Financial Work Conference, advancing quality financial opening into concrete action while fostering synergistic development of Hong Kong and Shanghai as premier international financial and gold markets."

This significant agreement covers two major forward-looking areas of co-operation:

1. Establishing a high-level, collaborative governance structure for Hong Kong's new gold central clearing system. The Hong Kong Precious Metals Central Clearing Company Limited, which is wholly owned by the Hong Kong Special Administrative Region Government, will have its Board chaired by the SFST while a representative from the Shanghai Gold Exchange will serve as Deputy Chairman. The representative of the Shanghai Gold Exchange will actively participate in the Board, contributing to the preparation of the system, the formulation of rules, the admission of participating institutions, and the provision of expert advice on system design, risk management and other areas. Shanghai and Hong Kong will work together to promote the efficient development of the clearing system and its alignment with international standards.

2. Opening new avenues for physical infrastructure synergy and market interconnectivity. The two sides will explore leveraging the Shanghai Gold Exchange's well-established physical warehousing management regime to provide secure gold management services for participants in both Hong Kong and international markets. The two sides aim to drive greater connectivity between on-exchange and off-exchange gold trading activities. The two sides will forge ahead broader mutual market access by exploring the provision of business convenience and technical alignment to investors from two places through the Hong Kong Precious Metals Central Clearing Company Limited and key participants in the emerging Hong Kong gold trading ecosystem, thereby creating a truly integrated, efficient and open ecosystem.

Mr Hui further elaborated on the Government's vision and supporting measures for Hong Kong's gold market development. They are:

1. Supporting the Airport Authority Hong Kong (AAHK) and financial institutions in establishing gold storage facilities, with a target to exceed 2,000 tonnes of storage capacity within three years, making Hong Kong a trusted global vault. The AAHK has launched a project to expand warehousing to a thousand-tonne scale, catering to local storage, delivery and transit requirements.

2. The FSTB has signed a memorandum of understanding with the Shenzhen Municipal Financial Regulatory Bureau, laying the foundation for processing trade co-operation between Hong Kong and Shenzhen. The next step is to welcome Hong Kong gold traders to engage in substantive co-operation with qualified Shenzhen refining enterprises.

3. Hong Kong's government-owned central clearing system for gold is on track to begin trial operations this year.

4. For the preferential tax regimes offered to funds and single family offices, the Government will propose including precious metals as qualifying investments. The target is to introduce the legislative proposal in the first half of this year.

5. This week, a new gold fund will list in Hong Kong. Its key features include leveraging Hong Kong's well-established gold infrastructure for physical gold trading and storage, with the option of physical gold redemption at bank. Also, the issuer plans to introduce an unlisted share class for potential distribution through licensed digital asset exchanges, bridging traditional and digital finance.

6. The release of an outlook by market participants on the development of Hong Kong's sustainable gold governance framework and standards at the gold-themed session of the Asian Financial Forum, with a view to fostering sustainable sourcing, environmental protection, and long-term responsibility standards.

Mr Hui stressed, "The signing of this agreement with the Shanghai Gold Exchange marks the dawn of a new chapter—one in which Hong Kong and Shanghai join forces to shape the future of global gold markets. Let us embrace this historic opportunity to build stronger bridges, ignite innovation and create enduring value for investors and economies alike."

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

Source: AI-found images

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

FSTB and Shanghai Gold Exchange sign co-operation agreement to foster high-quality development of Hong Kong's gold market Source: HKSAR Government Press Releases

Source: AI-found images

SCED attends APEC Ministerial Meeting held virtually

The Secretary for Commerce and Economic Development, Mr Algernon Yau, last evening (November 3) attended the 37th Asia-Pacific Economic Cooperation (APEC) Ministerial Meeting held virtually through video conference.

Under the theme for APEC China this year - "Building an Asia-Pacific Community to Prosper Together", Mr Yau at a discussion session highlighted that member economies must act together through enhanced dialogue and co-operation to achieve shared prosperity amid an ever-changing landscape and rapid technological advancement.

Citing digital transformation as an example, Mr Yau said that practical co-operation will continue to be required among member economies to harness their respective strengths in digital technologies in a people-centred and inclusive manner. Domestically, Hong Kong is strengthening its research capacity in frontier technologies, and launching programmes to promote public awareness and responsible use of AI. Hong Kong looks forward to sharing its experiences and engaging in mutual learning with other member economies in these areas.

Meanwhile, Mr Yau called on member economies to continue to strengthen connectivity in various areas, enabling the efficient flow of goods, services, capital, and people, while narrowing development gaps and creating opportunities for all sectors across the region. He added that any of the co-operation among member economies should continue to be guided by the Putrajaya Vision 2040 and the Aotearoa Plan of Action.

At another discussion session, Mr Yau shared his insights on how to enhance economic integration for new growth in the region. Noting that enhancing economic integration has been the core objective of APEC, he said that one of the directions is to continue to advance the Free Trade Area of the Asia-Pacific (FTAAP).

"As part of Hong Kong's wider efforts to contribute to the FTAAP agenda, we have been actively seeking early accession to the Regional Comprehensive Economic Partnership. We welcome the establishment of the Accession Working Group for Hong Kong in September this year, and hope that our accession could inject fresh impetus into advancing the FTAAP agenda," Mr Yau said.

Mr Yau also highlighted the importance of enhancing co-operation to deal with the seismic changes in the trade landscape. As technological advancement is increasingly transforming the conduct of international trade, deepening co-operation on this front is critical to promoting cross-border trade and investment. He said that to this end, Hong Kong fully supports the proposed Trade Digitalization Cooperation Framework as a guiding document for future co-operation.

In addition, Mr Yau stressed that the multilateral trading system must remain the foundation of regional integration and international trade. "We call on member economies to continue supporting the World Trade Organization (WTO)'s reform agenda, incorporating plurilateral initiatives into the WTO framework, finding a permanent solution for the moratorium on customs duties on electronic transmissions, and facilitating the Work Programme on Electronic Commerce," he said.

SCED attends APEC Ministerial Meeting held virtually Source: HKSAR Government Press Releases