Hong Kong's Secretary for Financial Services and the Treasury K C Chan Saturday (Jan 15) said Mainland's pilot scheme for the settlement of overseas direct investments in renminbi will facilitate Hong Kong's offshore renminbi market development.
Speaking on a local radio talk show on Saturday, Chan said the move will further enhance the circulation of renminbi funds overseas, and people will need to find an offshore market to conduct trading, lending activities and investment in renminbi.
Under the scheme, Mainland enterprises, upon approval by Mainland authorities, can conduct direct investments overseas using renminbi.
Since Hong Kong has a sound renminbi clearing and settlement system, he said, part of the overseas renminbi funds will stay in Hong Kong, increasing renminbi deposits in the city. This will allow enterprises to borrow money from the enlarged capital pool in Hong Kong, enhancing the city's financial market development.
Noting internationalizing the country's currency needs an offshore market and a local market, Chan said Hong Kong and Shanghai have different roles to play and both are equally important to the country's financial and economic development.
He said participants of the upcoming Asian Financial Forum to be held in Hong Kong next week will discuss renminbi internationalization and financial management opportunities and challenges in Asia.
As the speed of the economic rebound in European countries and the U.S. is relatively slow, the focus of the global economic growth in the coming five years will be in Asia. Chan said Hong Kong should grasp the opportunities to grow as investors' first choice for asset management.
