Hong Kong may extend its collaboration on offshore yuan business to financial centres other than London, the head of the monetary authority said yesterday.
The city, the first and largest offshore yuan centre in the world, agreed to jointly develop offshore business in the currency with London in January last year.
Now it is mulling extending the collaboration on offshore yuan business to New York and Singapore, according to Norman Chan Tak-lam, the chief executive of the Hong Kong Monetary Authority.
"Hong Kong is open-minded towards the development of offshore renminbi business and we hope to strengthen the co-operation with Singapore and New York to make the pie even bigger," Chan told Xinhua in New York yesterday.
"Hong Kong and our overseas counterparts could create a win-win situation."
Australia, France and Taiwan are also eyeing the lucrative business as the demand for overseas settlement in yuan continues to grow.
As of the end of April, yuan deposits in Hong Kong amounted to 836.6 billion yuan (HK$1.05 trillion), up 16 per cent year on year.
The number of settlement banks for yuan business is now more than 200.
Hong Kong bankers suggested that the city should not be afraid of competition in the yuan sector.
Anita Fung Yuen-mei, the chief executive of HSBC Hong Kong, said: "It's still a long way to go before it becomes a zero-sum game. We should not put much emphasis on competition among us and other markets at this stage.
"We should support neighbouring markets to boost the overall business."
Chan also encouraged more companies in the United States to use yuan as settlement currency, given China and the US are the world's second largest international trade partners.
Export growth from the US to China jumped 63 per cent between 2008 and last year, to US$133 billion, according to the HKMA.
Foreign companies could benefit from using the yuan for settlement with vendors or customers on the mainland as it would lower their exchange rate risk and speed up the payment process, Chan said.
If foreign governments allow investments to be made through yuan, it will stimulate more mainland companies to invest overseas.
Fung projected that 30 per cent of China's external trade would be settled in yuan in 2015 and said the currency would be fully convertible in 2017.