Following is a question by the Hon Andrew Yao and a written reply by the Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan, in the Legislative Council today (May 27):
 
Question:
 
     The Government is committed to establishing Hong Kong as an international centre for gold trading, storage, clearing and risk management, and has already made substantive progress. According to statistics from the World Gold Council, central banks worldwide purchased a total of 863 tonnes of gold last year, with the People's Bank of China being one of the world's leading buyers. There are views that, as an international financial centre, Hong Kong is an ideal place for developing an international gold trading centre. In this connection, will the Government inform this Council:
 
(1) given that the Hong Kong central clearing system for gold which is managed by the Hong Kong Precious Metals Central Clearing Company Limited wholly owned by the Government is scheduled to commence its trial operation within this year, of the current development of the system (including whether a systematic mode of operation, regulatory framework, risk management arrangements and interface mechanisms with existing financial market infrastructure have been established); whether the authorities will conduct industry consultations prior to the trial operation to ensure the robustness of the system and its broad connectivity with market participants;
 
(2) given that the Government has signed a memorandum of understanding with the Shenzhen Municipal Financial Regulatory Bureau to jointly build a regional gold ecosystem and lay a foundation for further co-operation in processing trade between Hong Kong and Shenzhen, whether the authorities have set specific phased targets for building the ecosystem, such as gold trading volume, storage utilisation rates and the value of processing trade;
 
(3) regarding the promotion of the mutual access with the Mainland's gold market, apart from Shenzhen and Shanghai, whether the Government will consider establishing similar collaboration mechanisms with other major gold producers or consumers and strengthening efforts through the Mainland Offices of the Hong Kong Special Administrative Region Government to promote Hong Kong's gold storage, clearing and risk management services to relevant enterprises; and
 
(4) whether it will actively explore with Mainland Customs and tax authorities, with the aim of achieving a storage capacity of 2 000 tonnes within three years, suitably relaxing the declaration limits for Mainland visitors bringing gold products for personal use into Hong Kong, for example, by raising the current 50-gram limit or simplifying the tax collection process for amounts exceeding the limit, so as to promote the development of Hong Kong's gold retail market?
 
Reply:
 
President,
 
     Against a backdrop of heightened geopolitical uncertainties, persistent inflationary pressures and restructuring of the international monetary system, the Government is actively promoting the development of Hong Kong as an international gold trading centre to attract the storage, clearing and delivery of gold in Hong Kong and drive the development of relevant industry chain including investment trading, derivatives, insurance, storage, trade and logistics services, with a view to diversifying international financial business and further consolidating and enhancing Hong Kong's status as an international financial centre.
 
     In consultation with the Security Bureau, the reply to the four parts of the question is as follows:
 
(1) The Hong Kong central clearing system for gold (the Clearing System) being established by the Government aims to provide efficient and reliable clearing services for gold transactions that meet international standards, thereby enhancing the reliability and efficiency of gold trading and physical delivery in Hong Kong. The Financial Services and the Treasury Bureau (FSTB) has established the Hong Kong Precious Metals Central Clearing Company Limited (PMCC), a wholly government-owned company, to serve as the governance body of the Clearing System. The Board of the PMCC comprises representatives from the Shanghai Gold Exchange, regulators and 11 banks to fully incorporate the feedback from various segments of the market. Members of the Board possess profound knowledge of international financial markets and extensive experience in the financial industry, providing valuable insights in areas such as system operation, regulation and risk management when jointly formulating the governance framework and rules of the Clearing System. Apart from the Board, the FSTB has also consulted industry stakeholders on system operation when establishing the Clearing System.
 
     Preparation for the operation of the Clearing System has entered its final stage. We plan to commence trial operation within this year to further understand and analyse the actual operation in the industry to ensure that the services of the Clearing System remain attractive and are operationally stable, thereby attracting more Mainland and international investors and users to choose Hong Kong as the preferred hub for clearing and delivery.
 
(2) and (3) To attract more gold to be stored, cleared and delivered in Hong Kong and to build a comprehensive gold trading ecosystem, the Government has set a clear target for expansion of storage capacity. By encouraging the Airport Authority Hong Kong and financial institutions to expand gold storage capacity in Hong Kong, we have set a target of achieving over 2 000 tonnes within three years to propel Hong Kong into a regional gold reserve hub. The Government is also actively encouraging gold traders to establish or expand refineries in Hong Kong. Invest Hong Kong and the Office for Attracting Strategic Enterprises have been working with relevant bureaux and departments to provide appropriate support to these enterprises, including assistance in identifying suitable factory and storage sites as well as providing relevant information and guidance. Several enterprises that are qualified to refine gold to international standards have already expressed interest in expanding into the Hong Kong market.
 
     The outline of the National 15th Five-Year Plan explicitly supports Hong Kong in developing a commodity trading ecosystem. Under the national strategic direction of accelerating the development of a financial powerhouse, the Government is actively leveraging the unique advantages of "one country, two systems" to contribute to the national strategic development, using the gold market as an entry point. The FSTB has signed a Memorandum of Understanding (MOU) with the Shenzhen Municipal Financial Regulatory Bureau and a co-operation agreement with the Shanghai Gold Exchange respectively to prepare for future mutual market access with the Chinese Mainland to build an integrated gold ecosystem, thereby enhancing the international influence of Renminbi in gold pricing and trading. The MOU signed with Shenzhen covers support for collaboration between Hong Kong gold traders and qualified refining enterprises in Shenzhen on processing trade, with a view to leveraging Shenzhen's refining capacity of international standard to refine gold for export to Hong Kong for trading and delivery purposes to expand the scale of Hong Kong's gold market. The FSTB is working with the relevant Mainland authorities to finalise the implementation details. Specific measures will be announced in due course.
 
     At the same time, the Government is also committed to deepening co-operation with Belt and Road countries and other international market participants, promoting Hong Kong's gold storage, clearing and risk management services through overseas visits, organising events, and exploring the signing of co-operation agreements. For instance, during his earlier attendance to the Annual Meeting of the Board of Governors of the Asian Development Bank in Uzbekistan, the Secretary for Financial Services and the Treasury took the opportunity to introduce the latest developments and opportunities in Hong Kong's gold market to participating finance ministers and central bank representatives. We will also make good use of the network of our Economic and Trade Offices in the Mainland and overseas to promote Hong Kong's direction and specific measures for gold market development.
 
(4) At present, Hong Kong does not impose any customs duty or import/export control on passengers bringing gold products into/out of Hong Kong. The Government will, in response to market demand and when necessary, explore with the relevant Mainland authorities the feasibility of providing more convenient arrangements for passengers, with a view to promoting the development of Hong Kong's retail gold market.

Ends/Wednesday, May 27, 2026
Issued at HKT 11:45

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