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Hong Kong gold flows to mainland plunged after China relaxed rules

Hong Kong handled 1,158 tonnes of bullion in 2013, but net gold flows to the mainland via the city fell to 67 tonnes in 2020.

Reported · Written up by our desk · China

A South China Morning Post investigation says China’s push to build gold reserves is tied to broader yuan internationalisation, with Hong Kong playing a key role in routing and safeguarding that trade.

In 2013, about one third of the world’s traded gold passed through Hong Kong, and the city imported 1,158 tonnes of bullion, overtaking India as the top buyer, the outlet reported.

After China relaxed restrictions in 2014, allowing more mainland banks to buy foreign gold without routing it through Hong Kong, net gold flows from the city to the mainland fell to 863 tonnes in 2015 and to 245 tonnes in 2019.

According to the Hong Kong Legislative Council cited by the outlet, net flows reached a low of 67 tonnes in 2020, after having largely been routed through Hong Kong when controls were stricter.

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