Hong Kong will take advantage of its strength in gold import and export to build itself into an international gold trading center, John Lee, chief executive of the Hong Kong Special Administrative Region (HKSAR), said while delivering his third policy address Wednesday.

Noting that Hong Kong ranks among the world's largest import and export markets for gold by volume, Lee said that the current complexity in geopolitics underscores Hong Kong's edge in security and stability, and hence an attractive location for investors for gold storage, spurring relevant activities such as gold trading, settlement, and delivery.

"This will spur development of the related industry chain, ranging from investment transactions, derivatives, insurance, storage, to trading and logistic services," Lee said.

The HKSAR government will promote the development of world-class gold storage facilities, facilitating the storage and delivery of spot gold by users and investors in Hong Kong, and driving demand for related services such as collateral and loan businesses, opening up new growth areas of the financial sector, Lee said.

The financial services and the treasury bureau of the HKSAR government will set up a working group to take forward the establishment of the international gold trading center, Lee said, adding that this will include, among other things, strengthening the trading mechanism and regulatory framework, promoting application of cutting-edge financial technology, and actively exploring with the mainland authorities on the inclusion of gold-related products in the mutual market access program.

The international gold trading center was part of the measures Lee announced Wednesday to strengthen Hong Kong's status as a global financial center. Among other measures, Hong Kong will deepen mutual market access and enrich offshore renminbi (RMB) business to reinforce its status as the world's largest offshore renminbi business hub.

Hong Kong will strive to provide more RMB-denominated investment product, including seeking support from the Ministry of Finance for boosting the size and frequency of issuing RMB sovereign bonds, and launching offshore RMB sovereign bond futures as soon as possible, Lee said.

It will also actively liaise with the mainland authorities to expand the bond connect as appropriate, Lee said.

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