Chan pledges to propel offshore yuan business

Hong Kong must continue to develop and promote its offshore yuan business as one of its key tasks, Financial Secretary Paul Chan Mo-po said.

The financial hub is now the world's largest offshore yuan business hub, handling around 75 percent of the world's offshore yuan clearing business - the volume of yuan trade settlements handled by Hong Kong banks exceeded 7 trillion yuan (HK$8.2 trillion) last year, Chan wrote in his blog yesterday.

The offshore yuan pool in the city has exceeded 800 billion yuan, accounting for approximately 60 percent of the world's offshore yuan deposits and the Ministry of Finance has issued yuan-denominated treasury bonds in Hong Kong for 13 consecutive years since 2009, with a total of 238 billion yuan bonds issued in the SAR so far, Chan pointed out.

The People's Bank of China has also established a standing mechanism for issuing central bank notes in Hong Kong - it has issued 500 billion yuan notes in the city since 2018, Chan noted.

As China's economy continues to expand, the demand for the yuan in international trade, investment, and reserves will continue to grow, Chan wrote, saying that Hong Kong will play an even more critical role as an offshore yuan business hub in the future.

Looking ahead, the authorities will further promote the development of Hong Kong's offshore yuan ecosystem in multiple directions, providing more yuan-denominated investments and channels, as well as financial services such as foreign exchange, and risk management tools for the exchange rate, and interest rate, he said.

It will also optimize the relevant market infrastructures to enable better circulation of the yuan in the offshore market, so as to facilitate the progress of yuan internationalization, Chan stated.

The Financial Secretary also said the authorities are determined to develop the territory into a more comprehensive and in-depth international financial center where bonds, funds, insurance, and derivatives will be promoted apart from the stock market.