Your Offshore Guide
Offshore Guide
Gold Trading HK
Future prospects
Hong Kong has achieved its status as a leading regional gold centre on the strength of a long history and solid background in the field of trading and manufacturing. Economic growth in China will, on the other hand, provide further support to the future development of the gold market in Hong Kong.
At that stage, the gold market in China remains highly restricted. Pricing, fabrication, imports and exports of gold and gold-related products, and the supply of gold to local manufacturing industries are under strict government control. Foreign participation in the Chinese gold trade is forbidden and only a limited number of foreign corporations have entered into joint ventures with Chinese enterprises in the field of manufacturing and mining.
The galloping economic growth in the last decade greatly boosted per capita income in China, particularly for thoserunning the privately-owned enterprises. During the first phase of the evolution, the increased earnings were spent in the accumulation of basic household goods but consumer preference has switched to more luxurious items including fashion wear, watches, cigarette lighters and gold jewellery. So far as gold jewellery is concerned, the initial demand was relatively small focusing on chuk kam adornments with simple designs. However, since the beginning of the current decade, consumption has greatly increased as wealth is building up among a wider cross-section of the population.
The population distribution in China is uneven and the per capita GDP differs vastly from one province to another. There are 31 provinces, municipalities and autonomous regions in China. This disparate economic growth greatly influences consumer preference and determines affordability of gold products in different provinces. China is not a homogeneous market as far as gold jewellery articles are concerned. While consumers in the Special Economic Zones along the south-eastern coast of the Mainland are more fashion minded and sophisticated, the demand in the less prosperous provinces focuses more on basic chuk kam ornaments and small bars.
Consumption of gold and gold jewellery in the Mainland reached an unexpected high level of 420 tonnes in 1992 although the quantity declined following the launch of the austerity measures in 1993. Current offtake is in the region of 230 tonnes.The economic and social reforms in China will continue and development and growth will gain momentum after a period of adjustment and consolidation. It is evident that the majority of the 1.2 billion people in China are prepared to strive for a better life. The continuation of the opening up of the country and the move towards market socialism will provide these people with ample opportunities.
While looking at current developments in China, it should be remembered that Hong Kong was just a rocky island in 1841 when Great Britain took over the administration of the Colony. With practically no natural resources, it is remarkable that Hong Kong has now been established as one of the world's most successful city states. The "laissez - faire" policy which the government employs, coupled with the flexibility, adaptability and hard-working nature of the Chinese people in Hong Kong, have contributed vastly to the success.
The sovereignty of Hong Kong will be returned to China in 1997 when the legal status of Hong Kong will be changed to a Special Administration Region (SAR) of China. The governor of the future SAR government will be appointed by China but Hong Kong will operate with its own laws and with its own legislative assembly. While there remain various issues to be addressed and resolved, the return of the sovereignty of Hong Kong to China will be in accordance with the Joint Declaration formalized by China and Great Britain in 1984.
During the interim period, local entrepreneurs in the business community in Hong Kong continue their undertaking in various fields with full confidence. Foreign investment is well maintained with Japan and the USA being the largest investors in the manufacturing industries in Hong Kong. Infrastructure projects are being developed in the territory by the government independently or jointly with the private sector in order to cope with the environments and growth beyond 1997.
The Airport Core Programme (ACP), for instance, is the largest project which will cost a total of HK$158 billion to complete. The programme consists of 10 inter-linked projects which are focused on the construction of a new airport at Chek Lap Kok to replace Hong Kong's existing airport, along with 34 kilometers of new highways, a railway, more than 350 hectares of land reclamation and a new town.
With regard to the bullion industry, the market in the territory will be further extended when Hong Kong becomes part of China in 1997. Chinese people have great affinity for gold. However, the existing per capita ownership remains exceedingly low at an estimated 1.5 grams. The acquisition of ornamental and investment gold jewellery by the people in the Mainland will accelerate on the strength of higher GDP growth. This development will increase the level of activities in the gold market in China and will provide further support to Hong Kong in enhancing its role as an international gold centre. Aside from the free enterprise environment and the infrastructure already developed as one of the major financial centres in the world, Hong Kong is at the geographical centre of Asia and is poised to become the gateway to China.
Hong Kong has achieved its status as a leading regional gold centre on the strength of a long history and solid background in the field of trading and manufacturing. Economic growth in China will, on the other hand, provide further support to the future development of the gold market in Hong Kong.
At that stage, the gold market in China remains highly restricted. Pricing, fabrication, imports and exports of gold and gold-related products, and the supply of gold to local manufacturing industries are under strict government control. Foreign participation in the Chinese gold trade is forbidden and only a limited number of foreign corporations have entered into joint ventures with Chinese enterprises in the field of manufacturing and mining.
The galloping economic growth in the last decade greatly boosted per capita income in China, particularly for thoserunning the privately-owned enterprises. During the first phase of the evolution, the increased earnings were spent in the accumulation of basic household goods but consumer preference has switched to more luxurious items including fashion wear, watches, cigarette lighters and gold jewellery. So far as gold jewellery is concerned, the initial demand was relatively small focusing on chuk kam adornments with simple designs. However, since the beginning of the current decade, consumption has greatly increased as wealth is building up among a wider cross-section of the population.
The population distribution in China is uneven and the per capita GDP differs vastly from one province to another. There are 31 provinces, municipalities and autonomous regions in China. This disparate economic growth greatly influences consumer preference and determines affordability of gold products in different provinces. China is not a homogeneous market as far as gold jewellery articles are concerned. While consumers in the Special Economic Zones along the south-eastern coast of the Mainland are more fashion minded and sophisticated, the demand in the less prosperous provinces focuses more on basic chuk kam ornaments and small bars.
Consumption of gold and gold jewellery in the Mainland reached an unexpected high level of 420 tonnes in 1992 although the quantity declined following the launch of the austerity measures in 1993. Current offtake is in the region of 230 tonnes.The economic and social reforms in China will continue and development and growth will gain momentum after a period of adjustment and consolidation. It is evident that the majority of the 1.2 billion people in China are prepared to strive for a better life. The continuation of the opening up of the country and the move towards market socialism will provide these people with ample opportunities.
While looking at current developments in China, it should be remembered that Hong Kong was just a rocky island in 1841 when Great Britain took over the administration of the Colony. With practically no natural resources, it is remarkable that Hong Kong has now been established as one of the world's most successful city states. The "laissez - faire" policy which the government employs, coupled with the flexibility, adaptability and hard-working nature of the Chinese people in Hong Kong, have contributed vastly to the success.
The sovereignty of Hong Kong will be returned to China in 1997 when the legal status of Hong Kong will be changed to a Special Administration Region (SAR) of China. The governor of the future SAR government will be appointed by China but Hong Kong will operate with its own laws and with its own legislative assembly. While there remain various issues to be addressed and resolved, the return of the sovereignty of Hong Kong to China will be in accordance with the Joint Declaration formalized by China and Great Britain in 1984.
During the interim period, local entrepreneurs in the business community in Hong Kong continue their undertaking in various fields with full confidence. Foreign investment is well maintained with Japan and the USA being the largest investors in the manufacturing industries in Hong Kong. Infrastructure projects are being developed in the territory by the government independently or jointly with the private sector in order to cope with the environments and growth beyond 1997.
The Airport Core Programme (ACP), for instance, is the largest project which will cost a total of HK$158 billion to complete. The programme consists of 10 inter-linked projects which are focused on the construction of a new airport at Chek Lap Kok to replace Hong Kong's existing airport, along with 34 kilometers of new highways, a railway, more than 350 hectares of land reclamation and a new town.
With regard to the bullion industry, the market in the territory will be further extended when Hong Kong becomes part of China in 1997. Chinese people have great affinity for gold. However, the existing per capita ownership remains exceedingly low at an estimated 1.5 grams. The acquisition of ornamental and investment gold jewellery by the people in the Mainland will accelerate on the strength of higher GDP growth. This development will increase the level of activities in the gold market in China and will provide further support to Hong Kong in enhancing its role as an international gold centre. Aside from the free enterprise environment and the infrastructure already developed as one of the major financial centres in the world, Hong Kong is at the geographical centre of Asia and is poised to become the gateway to China.
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