Hong Kong will step up efforts to develop a commodity trading ecosystem, chief executive John Lee Ka-chiu said in his policy address on Wednesday, outlining tax concessions, warehouse expansion and financial innovation to attract global traders.
The government will support the sector in setting up more approved warehouses, after the London Metal Exchange, a wholly owned unit of Hong Kong Exchanges and Clearing (0388), approved the establishment of eight delivery warehouses in the city.
Commodity traders will be offered a half-rate tax concession for setting up operations in Hong Kong, a move the government expects will spur demand for shipping and professional maritime services. Legislative amendments are scheduled for the first half of next year.
Hong Kong will also deepen ties with the Guangzhou Futures Exchange and other mainland commodity markets to contribute to China’s market internationalisation.
Planned measures also involve testing technologies such as electronic bills of lading and tokenised deposits in collaboration with the Hong Kong Monetary Authority and Brazil’s central bank to facilitate trade.
Meanwhile, the government will set up a Strategic Committee on Commodities, led by the Financial Secretary Paul Chan Mo-po, to strengthen top-down design and provide long-term strategic guidance for the sector.
