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Hong Kong broadens yuan’s financial footprint as currency gains global appeal

Hong Kong Monetary Authority widens scope of yuan finance to solidify status as ‘offshore laboratory’ for currency amid de-dollarisiation trend

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Hong Kong is looking to boost its position as the world's leading offshore yuan hub. Photo: Felix Wong
Julie ZhangandZoe SL Chan
Hong Kong’s latest pledge to deepen the use of the yuan in corporate financing, investment and cross-border trade reflected the city’s determination to defend its status as the world’s most valuable offshore yuan hub and widen its edge over Shanghai and Singapore, analysts said.
The road map, unveiled on Thursday by Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority (HKMA), shows “how Hong Kong can make renminbi usage more convenient, more diversified and more connected to global markets, while still managing risk”, said Stephen Law Cheuk-kin, president of the Hong Kong Institute of Certified Public Accountants.

Beijing’s promotion of the global use of the yuan, also known as the renminbi (RMB), creates an opportunity for Hong Kong to reinforce its status as what Law referred to as an “offshore laboratory and distribution hub” for the currency.

The HKMA’s plan could “lower friction for using yuan in trade and investment and make it easier for foreign and mainland clients to hold and deploy yuan,” said Law, who is also an adviser to China’s Ministry of Finance.

In Thursday’s release, the HKMA vowed to have “an enabling ecosystem that is characterised by easy access, stickiness and growth opportunities for international capital”.

Yue added that banks should provide “holistic, tailored” yuan products and services, leverage their global networks and seize the opportunities created by mainland Chinese companies expanding abroad.

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