Hong Kong's Financial Services and the Treasury Bureau (FSTB) has outlined a strategy to build a comprehensive commodity trading ecosystem, starting with the development of an international gold trading market. The initiative was detailed by Secretary Christopher Hui during a Legislative Council discussion on a motion concerning the promotion of the commodity trading ecosystem and the development of a physical delivery futures market.
The FSTB is actively promoting efforts to expand gold storage capacity in Hong Kong, involving the Airport Authority and financial institutions, and establishing a Hong Kong Gold Central Clearing System. This system aims to provide efficient and credible clearing services for internationally standardized gold transactions. Building on this foundation in gold, the bureau will explore extending related trading and warehousing expertise to other precious metals like silver and other commodities, aiming to gradually construct a complete commodity industry chain.
Secretary Hui noted the growing influence of the renminbi in commodity markets alongside its internationalization. The Shanghai Gold Exchange launched its first offshore delivery warehouse in Hong Kong last June, introducing a gold contract settled in Hong Kong and denominated in RMB. Additionally, Hong Kong Exchanges and Clearing Limited (HKEX) has listed RMB-denominated gold exchange-traded funds. Its subsidiary, the London Metal Exchange—the world's largest base metals exchange—accepts RMB as collateral, which helps accelerate RMB internationalization, attracts more traders to expand in Hong Kong, and fosters the development of related commodity ecosystems.
To enhance futures market regulation and the financial derivatives framework, the Hong Kong government and regulators have implemented several reforms. The Securities and Futures Commission (SFC) is studying the extension of the Investor Identification Regime to the exchange-traded derivatives market to strengthen market surveillance and protect investors. It has also consulted the public on amending the Financial Resources Rules to implement more appropriate capital requirements for over-the-counter derivatives in gold, other commodities, and foreign exchange to boost market competitiveness. Concurrently, the SFC has relaxed position limits for major exchange-traded derivatives and optimized the interest rebate mechanism for cash collateral at clearing houses.
To strengthen top-level design for commodity policies, the government has established a Commodities Strategy Committee led by the Financial Secretary. This committee brings together representatives from various policy bureaus, departments, and the industry to conduct in-depth research on opportunities for developing major and emerging commodity businesses in Hong Kong. Its remit includes optimizing market mechanisms and regulatory structures, building the industry ecosystem, exploring connectivity with mainland markets, and providing enhanced policy support and resource coordination for the development of the commodity trading market.
Regarding logistics services for commodities, the Transport and Logistics Bureau has been fully committed to supporting modern logistics development. The government has reserved 32 hectares of land in the Hung Shui Kiu/Ha Tsuen New Development Area for a modern logistics cluster to meet land needs for facilities including commodity storage. As an international logistics hub, Hong Kong possesses advantages in experience, technology, and talent for handling high-value goods. The local logistics industry has proven experience and capability in managing high-value commodities like gold and precious metals, providing strong support for further developing Hong Kong's commodity trading.
Furthermore, the Development Bureau has identified high value-added modern logistics as a key industrial pillar in planning the Northern Metropolis. In coordinating land use within the Northern Metropolis and other available land resources, the Development Bureau and its departments have clear responsibilities regarding issues related to warehousing land supply and expansion of modern logistics facilities, such as planning required land, formulating land leases, and approving plans. It will fully coordinate with the FSTB and relevant departments like Invest Hong Kong and the Office for Attracting Strategic Enterprises to provide assistance to related businesses.
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