Are Hong Kong’s protests crushing the city’s role in China’s Greater Bay Area plan?
- Greater flow of people, capital and goods across southern China would improve competition and bolster growth as trade war continues to bite
- To narrow gap with Hong Kong, Beijing has introduced preferential policies for taxation and foreign investment this year
Joshua Rotbart, a gold trader and shipper, has been watching Hong Kong’s unfolding political crisis with keen interest, fearing that further protests could damage the city’s leading position in the gold market.
Before this past weekend’s peaceful demonstrations, confrontations between the police and protesters had become increasingly violent over the summer, culminating at Hong Kong International Airport last week when hundreds of flights were cancelled.
The cancellations disrupted the transport of gold arrivals into the city, including those in transit to mainland China, raising the question of whether Beijing would look for other avenues to accumulate its holdings. More importantly, the protests have fuelled worries of whether Hong Kong’s role as a global financial centre in China’s Greater Bay Area plan will shrink.
“Hong Kong is the gateway to gold for China,” said Rotbart, founder of J. Rotbart & Co, a firm that trades, ships and stores physical gold and other precious metals. “But a lot of gold is being exported directly to China and our feeling is that the Chinese government is looking for other avenues. They don’t want everything to come via Hong Kong any more.”
Hong Kong’s biggest gold-storage facility is on the ground floor of a building within the airport. Rotbart estimated that at least HK$2 billion (US$294 million) worth of the precious metal had fled the city in the past week or so.