Shenzhen rolls out new policy to support Luohu's gold, jewelry industry

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The financial supervision bureau of Shenzhen issued a supporting policy for the development of Luohu's gold financial sector on Feb. 4.

The policy sets out a series of measures concerning the direction, innovation, cooperation and business environment of the gold financial industry in the district.

According to the document, Shenzhen supports Luohu establishing a fund for the gold industry to assist startup financing, recombination, mergers and acquisitions, and the implementation of large projects in the gold industry. The city supports gold enterprises in Luohu in working with financial agencies to explore the securitization of gold-related assets, such as mining rights, prospecting rights and the right to earnings from gold mines, as well as other kinds of equity products. Shenzhen also encourages gold and jewelry enterprises and transaction platforms to make use of stock markets, cross-border financing, supply chain financing, asset backed securitization and other channels to access financing. 

In addition, Shenzhen encourages Luohu to explore the possibility of setting up special gold banks, promotes fast development of specialized gold businesses, and supports the Shanghai Gold Exchange in establishing an independent legal entity in Shenzhen. The city also encourages insurance agencies to pilot investing insurance funds in gold-related commodities with the Shanghai Gold Exchange and supports trust and financial lease institutions to develop custom gold financial products. 

In terms of advancing financial science and technology, the policy states that Shenzhen backs the application of new technologies in the gold financing sector, such as blockchain and artificial intelligence. Shenzhen supports all kinds of financial agencies, professional service institutions and high-tech enterprises to showcase the potential of science and technology in the gold financing industry. It also supports Luohu in piloting "digital renminbi" coupons for gold and jewelry consumption to help make the district an innovation base for national gold consumption, and gold investment products and services. 

The policy also states that Shenzhen should strengthen cooperation with international gold financial agencies, and emphasizes that the city should further improve its exchange and cooperation mechanisms with the city of London in transactions of gold and precious metals. Shenzhen should also explore the possibility of promoting cooperation between the Shenzhen Stock Exchange and London Stock Exchange on gold exchange-traded products.

Statistics show that the annual sum of business transactions of gold and jewelry in the Shuibei-Buxin zone of Luohu accounts for around half of China's wholesale market of gold and jewelry, and more than 80% of the gold and jewelry market in Shenzhen, in both the number of businesses and their operation revenue.  

Experts have predicted that Shenzhen can achieve even broader market space say if it can connect with the rest of the world through Hong Kong.

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