Financial Intelligence · Business Insights | Haywood Cheung: Proposes Gold Storage and Refinery in Northern Metropolis, Urges Inclusion of Market Participants in Gold Clearing System
[Hong Kong] – The Hong Kong Gold Exchange Chairman, Dr. Haywood Cheung, has suggested that the government reserve space in the Northern Metropolis for the construction of gold storage facilities and a refinery, aligning with the city's push to develop as a gold trading hub.
The Policy Address outlined a series of measures to foster the development of Hong Kong's gold market, including expanding storage capacity and encouraging gold merchants to establish refineries in the city. In an interview with this station's "Financial Intelligence · Business Insights," Hong Kong Gold Exchange Chairman Dr. Haywood Cheung revealed that he has already proposed to the government his hope that authorities could allocate space in the Northern Metropolis for refineries and gold storage to be established. Cheung stated, "Gold storage is crucial for Hong Kong's development into an international gold center. Having physical gold stored in Hong Kong enables many derivative instruments and products to be created and established here. With physical gold present, various financial techniques, such as gold lending, arbitrage, and hedging, can take place in Hong Kong."
Regarding refinery development, he said Hong Kong possesses relevant experience and technology, and with government policy support, he believes there is significant potential for further growth. Cheung added, "Many mainland refineries have already contacted us. The Hong Kong Gold Exchange itself already has 31 licensed refineries, with over 12 to 13 being active. If we can invite more mainland refineries to establish a presence in Hong Kong, the overall trading, refining, and purification technologies can be further enhanced."
The Policy Address also proposed a government-led initiative to establish a Hong Kong Gold Central Clearing System. Cheung acknowledged that official leadership would undoubtedly help enhance credibility, but the market might also have some concerns. "Government-led initiatives certainly have their advantages, but there is considerable debate within the industry and the public. Concerns include whether a government-led approach, as opposed to a market-led one, might involve potential risks, such as political considerations causing hesitation within the industry. These are contentious issues," he said. He believes that even if government-led, the system needs to incorporate existing market stakeholders. He also emphasized the importance of inviting the Shanghai Gold Exchange to participate, as it would help promote gold connectivity and strengthen Hong Kong's status as an international gold trading center.
Source:i-cable (Chinese Only – English Version translate by AI)