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Hong Kong’s status as an international financial centre will be reinforced by yuan internationalisation and China’s economic transformations, according to top finance officials and industry players.
Despite facing “unprecedented changes”, Hong Kong’s connectivity with mainland China and potential to tap growing opportunities arising from the increased use of the mainland currency globally will consolidate and enhance the city’s unique status, deputy financial secretary Michael Wong Wai-lun told the Caixin Summer Summit in the city on Friday.
Hong Kong is already the world’s biggest market for the offshore yuan, processing nearly 80 per cent of settlements involving the currency worldwide, Wong said. It had 944.7 billion yuan (US$130.4 billion) in offshore yuan deposits as of March this year, according to Hong Kong Monetary Authority (HKMA) data.
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“Hong Kong is working very hard to contribute to the further internationalisation of renminbi,” said Wong. “We will continue issuing international bonds denominated in renminbi.”
Last year, the city’s yuan loans jumped by 140 per cent, and offshore yuan bonds increased by over 60 per cent, Eddie Yue Wai-man, the HKMA’s chief executive, said at the same conference.
‘Hong Kong is working very hard to contribute to the further internationalisation of renminbi,’ Michael Wong Wai-lun, the city’s deputy financial secretary, told the conference. Photo: Xiaomei Chen alt=’Hong Kong is working very hard to contribute to the further internationalisation of renminbi,’ Michael Wong Wai-lun, the city’s deputy financial secretary, told the conference. Photo: Xiaomei Chen>
“Whether it’s financing or investment, we hope to continue developing the offshore renminbi market in Hong Kong, making the flow of funds smoother, especially strengthening our ties with major trading partners in the Middle East and Asean [the Association of Southeast Asian Nations],” he said.
Saudi Arabia and dozens of other countries have agreed to use the yuan for trade settlements, creating demand for more investment channels in the offshore market. The gradual opening of the mainland Chinese capital market also provides more yuan-denominated assets for international investors and cheaper funding costs in the yuan compared with the US dollar.
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