Hong Kong’s bridge of gold completes China’s yuan ambition
With Shanghai pricing the contracts and Hong Kong handling offshore vaulting, Beijing is building a gold-backed route to currency internationalisation
In 2013, one-third of the world’s traded gold passed through Hong Kong. That year, the city imported 1,158 tonnes of bullion, overtaking India, the traditional top buyer. For all our love of the glittering metal, little of it stayed in our vaults. It mostly went straight to mainland China, where strict controls meant the bulk of its gold imports had to transit through here.
Little did we know that things would soon be turned upside down. In 2014, China relaxed restrictions, allowing more mainland banks to buy foreign gold without routing it through Hong Kong. Net gold flows to the mainland via the city fell to 863 in 2015, then to 245 tonnes in 2019, before reaching a nadir of 67 tonnes in 2020, according to a Hong Kong Legislative Council report.
