A Hong Kong commodities market focused on materials critical to clean energy and other emerging industries would elevate the city’s importance in global trade while providing a strategic alternative for economies and companies worldwide, according to a local private think tank.
Such a market would help commodities buyers avoid having all their eggs in one basket in Western markets, the Better Hong Kong Foundation said in a report on Wednesday.
“Developing the commodity market is an important measure to create a new growth point for Hong Kong’s economy,” added the report, which is based on nine months of research with commodity-market participants and the China Development Institute in Shenzhen.
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The report came after Chief Executive John Lee Ka-chiu called for Hong Kong to build an international gold and commodity trading ecosystem in last year’s policy address.
A commodities market would consolidate and enhance the city’s status as an international centre in three crucial areas of finance, shipping and trade, the report said. It would also promote the internationalisation of the yuan and support the Belt and Road Initiative, Beijing’s initiative to link economies into a China-centred trading network.
The suggestions and strategies made in the report are based on industry needs, said the foundation, which was established in 1995 by influential Hong Kong business and community leaders.
The market would help Hong Kong “seize the commanding heights” in the development of the new-energy and green industries, according to the report.
Given geopolitical tensions, Hong Kong’s commodities market would become a “strategic choice for different economies and companies to prevent the risks of ‘broken links’ and ‘cut-offs’ in Western markets”, the report said.
Excavators transfer coal at a port in Lianyungang, in eastern China’s Jiangsu province, on November 27, 2024. Photo: AFP alt=Excavators transfer coal at a port in Lianyungang, in eastern China’s Jiangsu province, on November 27, 2024. Photo: AFP>
“This study distinguishes itself from previous research on similar topics by conducting in-depth surveys with representatives from the commodity industry and financial experts,” said Karen Tang, executive director of the Better Hong Kong Foundation. “It explores strategies and pathways for developing the commodity market in Hong Kong, focusing on industry demand.”
