The Chinese government is giving consideration to allowing top-tier Belt and Road-affiliated companies to raise funds via yuan-denominated listings in Hong Kong, in a move that will shore up the former British colony’s position as a regional financing hub as well as advance internationalisation of the renminbi.
According to China Daily Zhang Xiaoqiang, vice-chairman of the China Centre for International Economic Exchanges, said that the government will select leading companies involved with Belt and Road for Hong Kong IPO’s.
While Zhang said that set rules will determine the selection of companies that can list in Hong Kong, there is still no schedule for when the move will go ahead.
Beijing hopes that the move will advance internationalisation of the Chinese yuan, as well as shore up Hong Kong’s long-standing position as a regional financial hub.
“Through such attempts, the government hopes Hong Kong is able to play a greater role to facilitate the initiative on the investment front and further promote internationalisation of the yuan,” said Zhang.
According to Zhang Hong Kong is an ideally positioned to raise funds for Belt and Road projects, given its lack of capital or currency convertibility controls.
Hong Kong’s first yuan-denominated IPO took place in April 2011, with the listing of Chines tycoon Li Ka-shing’s Hui Xian REIT.