Russia funnels record amount of gold to China via Hong Kong

Russia traded nearly 100 tonnes of gold through Hong Kong in the first seven months of this year, a record almost three times the volume seen in the same period last year. Moscow is thereby effectively bypassing the Western sanctions imposed after the invasion of Ukraine. Hong Kong and China impose no restrictions on Russian gold, and despite US sanctions against Hong Kong companies in 2024, transit volumes only continued to grow.

In brief:

• Russia is exporting record volumes of gold via Hong Kong, beyond the reach of Western sanctions
• Since 2022, Hong Kong companies have bought $35 billion worth of Russian gold, with most of it flowing through to China
• US sanctions against Hong Kong companies in 2024 failed to slow the trade

From London to Hong Kong

After Russia invaded Ukraine in 2022, London closed its doors to Russian gold. The London gold market has long been one of the most important in the world, and exclusion from it was intended as financial pressure on Moscow. Russia responded by redirecting its gold exports entirely towards Asia.

Hong Kong and China impose no restrictions on the import of Russian precious metals, which quickly made this route popular. Most of the gold arriving through Hong Kong eventually flows on to mainland China.

Sanctions have little effect

The United States took further measures in 2024 by specifically sanctioning Hong Kong companies involved in Russian gold trading. That had the opposite effect: the flow accelerated instead of slowing down.

Hong Kong parties have bought a total of $35 billion worth of Russian gold since 2022, the Financial Times reports. The record pace of recent months shows that Russia is organising its gold exports ever more efficiently along this route, out of reach of Western financial pressure.