Details of a pilot scheme for yuan capital account convertibility in the Shanghai Free Trade Zone will be announced this quarter.
So said the executive vice mayor of Shanghai, Tu Guangshao, at the annual Asian Financial Forum in Hong Kong. Tu also expects more mainland financial resources to flow into Hong Kong.
"It is a major year for the FTZ where more progress, especially on the opening of capital account, can be seen. Relevant legislation, negative list and outbound investment will be made," he said yesterday.
"Shanghai and Hong Kong will have more chances for high-level cooperation in the future after the FTZ's opening."
At the same time, China Merchant Group chairman Fu Yuning and China International Capital Corporation chief executive Zhu Yunlai said they expect the yuan to be completely convertible in five to 10 years.
Hong Kong has become the world's largest offshore yuan financing center in the past decade.
Average daily turnover of yuan gross settlement has hit 400 billion yuan (HK$513 billion), while a total of 3 trillion yuan worth of offshore yuan trade settlements were recorded in the first 11 months of 2013, Chief Executive Leung Chun-ying said.
Au King-chi, permanent secretary for financial services and the treasury, said the SAR hosts the largest offshore yuan liquidity pool, amounting to more than 1trillion yuan. It is also a platform to APEC countries as leading users of the currency.
More than 180 out of 212 banks that participate in the yuan clearing platform are from APEC economies and 150 banks and corporations from the region issue offshore bonds in the city.
Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung said there will be good news on mutual recognition of funds between Hong Kong and the mainland this year.
The yuan rose to a 20-year high against the US dollar yesterday after the central bank raised the currency's daily reference rate to 6.0950 yuan per dollar.