Hong Kong to gain as China streamlines cross-border gold trade

Gold trading between Hong Kong and China is expected to rise with the People’s Bank of China announcing on Wednesday a rule change from June 1 to simplify cross-border shipment procedures that would help speed up gold imports into the country.

Companies that frequently import and export gold and gold products will be allowed to apply for a single permit that can be used for up to 12 shipments, the central bank said in a statement on its website.

China currently has only 15 authorised gold importers, including major banks such ICBC, which need to register every single shipment.

Gold traders said the rule change would benefit not just mainland Chinese gold importers but also Hong Kong gold traders that deal with mainland importers.

“Since mainland China is the largest gold producer and consumer worldwide, the simplification of rules will speed up imports and hence promote more cross-border trading,” said Gary Cheung, chief executive of Tung Shing Bullion (Brokers).

Cheung said gold is often imported from overseas into Hong Kong before being re-exported to mainland China, so gold dealers in the city would benefit from the easier shipment procedures.

“China has been very keen to promote the gold industry and the latest PBOC move would help its market develop further. This will also help in the internationalisation of the yuan by promoting more cross-border trading of gold,” Cheung said.