Policy Address 2024 | Strengthening HK's role as global offshore RMB hub
Hong Kong Chief Executive John Lee's third Policy Address reaffirms the city's role as a leading international financial center, ranking third globally and first in the investment environment. The government will continue to implement reforms to further strengthen this status.
Deepening Market Access and Offshore Renminbi (RMB) Business
Hong Kong will enhance mutual market access and reinforce its position as the world's largest offshore RMB business hub, supporting the internationalization of the RMB. The government will upgrade infrastructure, including the Central Moneymarkets Unit, to facilitate multi-currency asset settlement by international investors. Key initiatives include:
- RMB Bond Market: Developing infrastructure for RMB-denominated bond repurchase (repo) transactions and making RMB sovereign bonds a preferred collateral choice in global markets.
- Wealth Management Connect: Enhancing the Cross-boundary Wealth Management Connect Scheme to provide expanded investment opportunities.
Expanding Offshore RMB Liquidity
Hong Kong will boost offshore RMB liquidity through the currency swap agreement with Mainland China, enabling the Hong Kong Monetary Authority (HKMA) to better support economic and trade development. Other measures include:
- Global RMB Settlement: Expanding the night-time, cross-boundary service capability of Hong Kong's RMB Real Time Gross Settlement System.
- RMB Financing: Providing more diversified channels for offshore RMB financing.
Expanding RMB Investment Products
Hong Kong will expand its offerings of RMB-denominated investment products to further solidify its role as the primary offshore RMB hub:
- RMB Stock Trading: Encouraging more companies on the Hong Kong Stock Exchange (HKEX) to list shares in the RMB trading counter.
- RMB Bonds: Increasing RMB bond issuances, supporting green and sustainable bonds, and seeking approval from China's Ministry of Finance to boost the issuance of RMB sovereign bonds and introduce offshore RMB sovereign bond futures.
- Bond Connect Expansion: Working with Mainland authorities to expand the scope of eligible investors in the Bond Connect (Southbound Trading) and enhance liquidity management tools for offshore investors.
By implementing these initiatives, Hong Kong aims to further its status as a global financial center and contribute to RMB internationalization.
Related News:
Policy Address 2024 | HK to build international gold trading market and explore low-altitude economy
Policy Address 2024 | CE to emphasize harmony, vitality, and prosperity for HK today
Comment