Hong Kong plans gold depository to compete with U.S., Europe

Gold Depository Means
to Raise Hong Kong's
Financial Standing

Olivia Chung
The Standard, Hong Kong
Tuesday, November 21, 2006

http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=32305&sid=...

A gold depository at Hong Kong International Airport is in the final planning stages, Airport Authority chairman Victor Fung Kwok-king said Monday.

"The gold depository would enhance Hong Kong's status as an international financial center," Fung told reporters on the sidelines of a Hong Kong General Chamber of Commerce luncheon. "We are discussing with the Hong Kong gold industry how to operate it."

Alvin Ching Man-kit, former president of the Hong Kong-based Chinese Gold & Silver Exchange Society, said earlier that the HK$20 million gold depository, the first large commercial one of its kind in Asia, will provide gold storage for central banks and other large financial institutions that are often forced to keep their gold in the United States and Europe.

Ching expects a company for the gold depository to be set up by December, and that it will start accepting gold next year.

Meanwhile, Fung said the Airport Authority has not yet decided whether a third runway at Chep Lap Kok should be built.

"We are still doing a feasibility study on the proposed third runway. What we can do now is optimize the assets we have, making more efficient use of present runways, present terminals and present concourses," he said.

Fung said the authority is looking at enlarging the area beside the existing runways to ease congestion and allow aircraft to take off and land quicker.

"One of the air traffic problems Hong Kong is facing is traffic jams in the sky," he said. "To solve it, the AA has to discuss with other air traffic control authorities in the region and, in the long run, the issue will be handed to the central government to deal with."

Fung, who is also chairman of the Greater Pearl River Delta Business Council, said although Hong Kong is competitive in terms of world-class infrastructure -- including the seaport and airport -- the flow of goods, funds and other commodities must remain free from constraints and friction to ensure the city's future competitiveness. In addition, given that China's strong economic development has expanded to its second-tier cities, connections with those cities could become an important consideration for many Hong Kong companies in determining where to locate vital activities, he said.

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