Xu Zhengyu: Hong Kong is gradually building a complete commodity trading ecosystem to comprehensively enhance competitiveness

The Zhitong Finance App learned that Hong Kong's Secretary for Financial Services and the Treasury, Mr Hui Ching-yu, responded in writing to lawmakers' questions that the government is actively building a commodity trading ecosystem by developing the international gold trading market as an entry point. In July of this year, the central gold clearing and settlement system began trial operation. Meanwhile, the Hong Kong Airport Authority has also launched a kiloton-level storage facility project. At the same time, a number of private institutions (including banks) are also actively expanding their storage capacity.

On the basis of consolidating its advantages in the gold trading market, Hong Kong will gradually expand into other precious metals businesses with reference to relevant trading and warehousing support experiences to build a complete commodity industry chain.

Xu Zhengyu said that since January 2025, the London Metal Exchange, a wholly-owned subsidiary of the Hong Kong Stock Exchange, included Hong Kong as its licensing site and began accepting applications from warehouse operators, by the end of June 2026, a total storage area of over 52,000 square meters had been put into operation in Hong Kong, with an inventory of more than 24,000 tons.

Among the seven metals currently allowed to be delivered in Hong Kong by the London Metal Exchange, copper and zinc are the most active in Hong Kong. Their stocks in Hong Kong are 10,700 tons and 8,650 tons respectively, accounting for 44% and 35% of the total storage volume.

As the commodity trading ecosystem continues to develop, it is expected that demand for related warehousing facilities and logistics land will continue to rise. The plan for the Northern Metropolitan Area (Beidu) is industry-led. The government has reserved industrial land (including industrial, logistics and storage land) in different new development zones to meet the demand for warehouse space for commodities. The Government also plans to invite the logistics industry (including operators interested in developing commodity storage facilities in Hong Kong) to submit a letter of intent to develop the first plot of land in the logistics industry within this year, so that the Government can develop a development model that meets the needs of the industry.

The land use of the 23-hectare Hung Shui Kiu Industrial Park has been expanded to cover different industries. Commodity warehouses or supporting facilities can be developed, and legal land ratio restrictions have also been removed, making development more flexible. Hung Shui Kiu Industrial Park Co., Ltd. has been put into operation and is formulating appropriate specific development plans and contacting companies interested in settling in the park to accelerate the introduction of the industry.

Furthermore, the “Northern Metropolitan Area Development Bill”, which was first read on July 8 this year, can also facilitate the planning and construction of commodity warehouses or supporting facilities, including facilitating the adoption of innovative designs, materials and construction techniques in related projects, or improving the quality, function or sustainability of the design or construction of the relevant projects; if land use must be restructured to accommodate commodity transactions, it can also be used to streamline urban planning procedures. The time period was shortened from at least nine months to two months.

To attract relevant leading enterprises to settle in Hong Kong, the Hong Kong Financial Services and Treasury Bureau, together with the Introduction Office and the Investment Promotion Department, promote the direction and specific measures of developing Hong Kong's commodity trading ecosystem through various meetings, visits and large-scale events (such as industry conferences, exhibitions and seminars). With the support of the Investment Promotion Department, some major commodity warehousing and logistics companies have also set up London Metal Exchange and Chicago Mercantile Exchange delivery warehouses in Hong Kong to actively integrate into Hong Kong's commodity ecosystem.