The Chinese Gold & Silver Exchange (CGSE) successfully held its annual International (Silver) Conference Cum Introduction of CGSE Gold & Silver Trading in Shenzhen Qianhai on 8 Dec, 2014.
In the fourth quarter this year, CGSE launched its Qianhai programme and the first batch of CGSE Members - 68 in total - have registered their
business entities in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (hereinafter referred to as “Qianhai Cooperation Zone”). CGSE is the first exchange to launch its operation in the Cooperation Zone.
In addition, CGSE has finalized the arrangement of “Hong Kong-Shanghai Precious Metals Connect” with the Shanghai Gold Exchange to further
develop itself into a major hub of international precious metals market. The conference received staunch support from Qianhai Authority, InvestHK and Financial Dispute Resolution Centre, and attracted an audience of hundreds of market experts from mainland China, Hong Kong and South East Asia. With deeper and broader discussion among the attendees on key issues on gold and silver, CGSE explored with speakers and guests on how to extend its business in Qianhai.
The Guest of honour at the Conference was Ms. Qin Hong, Deputy Minister of Liaison Office of the Central People’s Government in the HKSAR. Many industry experts shared their insights on the latest market trends. Among the guest speakers were Mr. Zhang Bei and Ms. Tian Min, Director General and Deputy Director General, Qianhai Authority; Dr. Dong Feng, Precious Metals Business Department, ICBC (Head Office); Mr. Ju Mingyu, Shanghai RMB Trading Business Main Office, BOC; and Mr. Huang Chongchong, Chairman, Zhejiang Zhoushan Bulk Commodity
Exchange Co., Ltd. and Executive Director, National Silver Culture Research Foundation.
Furthermore, Dr. Haywood Cheung, President of CGSE, briefed the audience on the business model of Shenzhen Qianhai Chinese Gold &
Silver Exchange Society Co., Ltd., while Ms. Qin Hong and Mr. Zhang Bei officiated at the ceremony on CGSE’s launch of business in Qianhai.
Strengthening Shenzhen-HK cooperation in Qianhai zone Speaking at the conference, Mr. Zhang Bei said:”I hope CGSE could bring a wealth of international operation experience to Qianhai, including the well-established system and international practices, serving as role models for Qianhai to learn from.”
“On the other hand, I also hope CGSE could use Qianhai as a gateway to make inroad into the broad, extensive mainland market and further develop its business, leveraging on gold and other precious metals in the robust value chain of the manufacturing sector,” added Mr. Zhang.
Mr. Zhang noted that Shenzhen is a key national centre for production, processing, and wholesale and retail of gold. He looked forward to establishing a trading platform in Qianhai that is equipped with negotiation power and pricing power in the Asia Pacific precious metals market, through closer cooperation between Shenzhen and Hong Kong, thereby facilitating the optimization of industrial structures of the two cities.
Mr. Zhang pointed out that Qianhai will continue to promote policies for financial innovation, including the pilot schemes for QFLP Investment and QDLP Investment, permission of qualified foreign and domestic enterprises to invest in domestic and overseas markets, development of cross-border loans and improvement of legal system to align with international standards.
Commenting on the prospect for Qianhai, Dr. Haywood Cheung said: “Qianhai offers a huge opportunity for the gold and silver industries. A
breakthrough appeared following the appointment of Mr. Zhang as Director General of Qianhai Authority. The intention of Mr. Zhang, the Qianhai Government and the Central Government is to help SMEs in Hong Kong develop their businesses on the platform provided by Qianhai under the “early and pilot implementation” policy. The policy background presents a tremendous opportunity for SMEs in Hong Kong to tap the mainland’s gold and silver markets.
CGSE has been granted the approval to build a gold vault (1,500-ton capacity) in Qianhai and it will take 1.5-2 years to complete the construction. The gold vault is expected to run on a bonded warehouse model (under the principle of “outside the customs but inside the border”) with tax incentives which could help CGSE attract overseas investors to trade in gold and other precious metals. CGSE could also utilize the bonded warehouse for delivery of physical gold and for development of mainland business.
Joining Shanghai Gold Exchange to launch "Hong Kong-Shanghai Precious Metals Connect" Dr. Cheung added that CGSE has signed agreement with Shanghai Gold Exchange for “Hong Kong-Shanghai Gold Connect” in September this year and the interconnected trading platform is expected to come into operation after the software integration of two gold exchanges is finished in the second quarter of 2015.
The interconnection of two gold exchanges will allow CGSE legal access to the mainland market through 15 state-approved banks with gold import licenses. Under the “Hong Kong-Shanghai Gold Connect”, CGSE may also trade its 9999 RMB Kilobars on the international board and the main board of Shanghai Gold Exchange after making declaration to the relevant customs authority via the Shanghai Gold Exchange. Under the principle of “outside the customs but inside the border”, investors may engage in gold lending, conduct arbitrage to gain from the spreads between the exchange rates of CNH and CHY, and implement risk management measures. CGSE expects the presence of arbitrage opportunity
could attract investors.
The CGSE conference has provided an effective platform for Hong Kong and international gold and silver merchants, and mainland jewelry merchants to exchange views and share their outlook for the precious metals markets. It is expected that CGSE will continue to fulfill its mission to facilitate the interaction and exchange among industry participants in the annual conference next year, with a view to building a better and brighter future for the precious metals industry.
Soucre: The Standard