China Relocates Gold Reserves to Build Hong Kong Bullion Hub

The People's Bank of China is relocating gold reserves from London to Hong Kong to establish the city as a major global bullion-trading hub. This strategic shift supports a new gold clearing system launched on a trial basis last month, designed to enhance Hong Kong's role in global price discovery and increase its competitiveness against regional rivals like Singapore.

Governor Pan Gongsheng confirmed in July that the central bank will continue to increase the allocation of national foreign reserves to Hong Kong. As part of this expansion, Hong Kong is inviting other central banks, specifically those within the Belt and Road Initiative, to participate in the clearing system.

China aims to position itself as a custodian for foreign gold reserves, a role it has already implemented for Cambodia. The initiative is coordinated through the State Administration of Foreign Exchange and the Financial Services and the Treasury Bureau of Hong Kong.