Budget Speech

Developing Offshore Renminbi Business

69.      As our country's capital account has yet to be fully liberalised, developing offshore RMB business in Hong Kong is the best option for promoting the use and circulation of RMB outside the Mainland in an orderly manner. In December last year, Premier Wen Jiabao told the Chief Executive that the Mainland would continue to promote cross-border trade settlement in RMB in Hong Kong, explore ways of developing various businesses that would facilitate the circulation of RMB, and foster the development of RMB bond business in Hong Kong. We are grateful for this encouragement and support. In the long run, we hope that Hong Kong will become the first testing ground for all new measures relating to the liberalisation of China's capital account and the regionalisation and internationalisation of RMB. The SAR Government will continue to actively take forward work in this regard.

70.      Since the introduction of RMB trade settlement in July 2009, corporations in Hong Kong and other areas (e.g. the ASEAN countries) can conduct trade settlement in RMB through banks in Hong Kong. We, together with the Mainland authorities, will continue to study the ongoing refinements to the RMB trade settlement services, and to promote the expanded use of RMB outside the Mainland. We will also continue to develop the RMB clearing platform in Hong Kong, thereby facilitating Hong Kong's development as a regional RMB settlement centre.

71.      Last year, the amount of RMB bonds issued in Hong Kong reached RMB 16 billion, including RMB 6 billion of sovereign bonds launched in Hong Kong for the first time. This reflects the popularity of RMB investment products in Hong Kong. We hope to further promote the development of RMB bond business in Hong Kong, such as expanding the issuance size of bonds and increasing the types of bond issuers and the classes of qualified investors. The recent elucidation by the HKMA has suggested that apart from approved Mainland entities, non-Mainland entities may also issue RMB bonds in Hong Kong. As long as the bond issuance does not entail cross-border flows of RMB funds into and out of the Mainland, the range of eligible issuers and issue arrangements can be determined in accordance with the applicable regulations and market conditions in Hong Kong. We also hope that RMB sovereign bonds will be issued on a regular basis in Hong Kong and that RMB-denominated investment products will be developed. With all of this, we hope to see RMB business scale new heights this year.

Content | Next Page