DAB urges expansion in yuan business
The DAB has called for expanded yuan business in Hong Kong and the establishing of a petroleum and gold futures market to strengthen the city's position as an international financial centre.
Legislator Chan Kam-lam, economics spokesman for the Democratic Alliance for the Betterment and Progress of Hong Kong, said a yuan offshore market should be set up in Hong Kong. To achieve this, Mr Chan said Hong Kong should strive to become a pilot spot for yuan exchange, gain support from the central government to open more yuan businesses and have more yuan circulating in the city's banking system.
'If Hong Kong can be a pilot spot for yuan exchange, it could strengthen Hong Kong's status as an international financial centre and advance the nation's financial system reform,' he said.
'What the mainland worries the most about is that there may be a repeat of what happened in 1997-1998 [the Asian financial crisis], that's why their cautious attitude is understandable.'
Mr Chan unveiled the last three of five party reports that explored ways to strengthen the city's position as a financial hub. Party representatives will meet Financial Secretary Henry Tang Ying-yen to discuss the reports next Thursday
In the report, the party also says Hong Kong has the potential to develop a petroleum futures market by establishing a limited company for petroleum futures transactions.
'The mainland market would be mainly responsible for transactions within the mainland and establish a storage house to cater for transactions of real products, while Hong Kong would be responsible for transactions outside China. The contracts will be calculated in US dollars and will be settled in cash,' it suggests.
It also calls for the development of the gold futures market.