Hong Kong to Explore Gradual Expansion of Offshore Renminbi Cross-border Usage within Greater Bay Area

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Hong Kong’s financial secretary has flagged the further expansion of the cross-border usage of the renminbi within the Greater Bay Area of Hong Kong, Guangdong and Macau, as part of a broad slew of measures to drive growth of the offshore renminbi market.

Speaking at the 2021 Financial Street Annual Forum in Beijing on 21 October, Hong Kong financial secretary Paul Chan Mo-po hailed the increasing integration of Hong Kong’s financial markets with those of mainland China.

“The northbound legs of Shanghai-Hong Kong Connect and Shenzhen-Hong Kong Connect saw average daily transactions of 120.7 billion yuan this year as of 30 August, for a YoY rise of 34%, while the northbound leg of Bond Connect has enabled offshore institutions hold nearly 3.8 trillion yuan in bonds as of the end of August.

Chan highlighted a range of measures currently being explored by Hong Kong’s financial authorities to drive the development of the offshore renminbi market in Hong Kong and expedite internationalisation of the renminbi, including:

  1. Raising the liquidity of the offshore renminbi, striving for expansion of interconnection arrangements, and providing more effective bidirectional channels for onshore and offshore renminbi funds.
  2. Driving the development of renminbi products on the offshore market, including diversified renminbi product issuance and bond transactions, as well as renminbi-denominated wealth management products.
  3. Raising demand for the issuance and trading of renminbi securities, providing more renminbi financing and investment options for listed companies and investors.
  4. Further improvements to offshore renminbi financial infrastructure, including bond tool settlement systems and optimisation of services, and ensuring that renminbi financial infrastructure is competitive, to ensure that Hong Kong has sufficient capability to support long-term development of the offshore renminbi market.
  5. Seizing the advance trial opportunities offered by the Greater Bay Area. Researching and gradually expanding the scale and scope of cross-border offshore renminbi usage. Exploring the innovation of more diversified and convenient renminbi assets and services, and the orderly expansion of renminbi asset cross-border transactions within the Greater Bay Area.
  6. Strengthening renminbi operational ties with offshore markets, driving the use of Hong Kong financial platforms for transactions, and continuing to unveil more renminbi investment, financing and risk management products.

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