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RPT-China's Shenzhen unveils ambition to become gold finance hub

RPT-China's Shenzhen unveils ambition to become gold finance hub

· 02/04/2021 18:00
RPT-China's Shenzhen unveils ambition to become gold finance hub

Repeats story published earlier without changes

- The Chinese city of Shenzhen on Thursday unveiled measures to turn its jewellery-filled Luohu district into a gold-based financial hub with links to neighbouring Hong Kong, Shanghai and even London.

Under the 24-point plan released by the Shenzhen Municipal Financial Regulatory Bureau, financial institutions will be encouraged to launch innovative investment products linked to gold, including gold-backed wealth management products and gold exchange-traded funds.

Consumption of gold in China, the world's biggest gold purchaser, fell 18% last year but gold prices XAU= hit record highs in 2020 as the COVID-19 pandemic saw investors pile into the metal. nL1N2K703X

China has long been trying to expand its gold industry and make it more international as London remains the world's biggest gold trading centre.

Shenzhen, in southern China's Guangdong province on the border with the gold hub of Hong Kong, should look into cross-border gold finance business with the former British colony, as well as with Macau, the document said.

It should also explore a partnership between the Shenzhen Stock Exchange (SZSE) and the London Stock Exchange (LSE) in gold exchange-traded products, according to the plan, with Shenzhen gold and jewellery companies encouraged to "go global" and issue gold bonds or shares in London.

An SZSE spokesman said he had nothing to add and the LSE did not immediately respond to a request for comment.

Closer to home, Shenzhen will support the Shanghai Gold Exchange, the world's biggest physical gold bourse, to establish an independent legal entity in Shenzhen, providing gold and silver-related products and services for small and medium financial institutions and retail investors.

Gold companies and financial institutions will be encouraged to build bonded gold stores in Luohu, the document said.

Eligible gold and jewellery companies will also have easier access to the interbank and exchange bond market for financing, it said, adding that the local government would support the establishment of privately-run banks specialising in gold-related businesses.

(Reporting by Samuel Shen and Tom Daly; additional reporting by Peter Hobson; editing by Barbara Lewis)

((tom.daly@thomsonreuters.com; +86 10 5669 2119;))