Showcasing Hong Kong as the offshore renminbi centre

The Chief Executive of Hong Kong Monetary Authority (HKMA), Mr Norman Chan, spoke at the RMB Australasia Summit held in Sydney today (Thursday). The Summit was attended by over 300 participants from leading financial institutions and corporates in Australia and New Zealand.

Mr Chan pointed out that, “With China becoming the second largest trading nation and economy, specifically with external trade surpassing US$3 trillion in 2010 and direct investment activities also growing significantly over the past decade, the use of renminbi (RMB) in cross-border transactions is likely to expand very rapidly in the future.” For example, from 2000 to 2010, China’s exports to Australia increased by 4 times to US$30.7 billion, while imports from Australia increased by 10 times to US$60.3 billion. Meanwhile, direct investment flows between China and Australia also increased by more than 9 times to US$3.3 billion over the same ten-year period. “The wider use of RMB will greatly enhance all these bilateral trade and investment flows as it helps reduce currency conversion costs and exchange rate risks.”

The Summit is the first of a series of overseas roadshows that the HKMA is conducting to showcase Hong Kong as the offshore RMB centre. These roadshows aim to promote overseas interests in the one-stop financial platform provided by Hong Kong for offshore RMB businesses, ranging from RMB trade settlement services, bank financing, bond issuance to wealth management.

“With the strong support of the Central Government for Hong Kong to develop into an offshore RMB business centre, a policy which has been enshrined in the National 12th Five-Year Plan, Hong Kong is ideally placed to serve financial institutions and corporates from Australia and other economies which are expected to have continually expanding trade and investment links with Mainland China in the years ahead,” said Mr Chan at the Summit.

Mr Mike Smith, Chief Executive Officer of Australia and New Zealand Banking Group Limited (ANZ), said on the same occasion, “A globally convertible RMB is an important component in realising the Chinese government’s growth aspirations. The real impact for Australia is the introduction to the global economy of another significant currency – potentially with a financial market that will become as large and as deep as that of Europe.”