Hong Kong and London Forum to Promote Cooperation on Development of Offshore Renminbi Business
The Hong Kong Monetary Authority (HKMA) and the UK Treasury today (Monday) announced the launch of a joint private-sector forum, to be facilitated by the HKMA and the UK Treasury, to enhance cooperation between Hong Kong and London on the development of offshore renminbi (RMB) business.
This Forum was set up following a discussion between the Chief Executive of the Hong Kong Special Administrative Region (HKSAR), Mr Donald Tsang, and the UK Chancellor of the Exchequer, Mr George Osborne, in September 2011 to foster cooperation on development of offshore RMB business.
The Forum will focus on exploring synergies by enhancing linkages between Hong Kong and London, specifically regarding clearing and settlement systems, market liquidity and the development of new RMB denominated financial products. It will comprise representatives from both Hong Kong and London of banks, including HSBC, Standard Chartered, Bank of China, Deutsche Bank and Barclays, and may invite representatives of other institutions as appropriate. The Forum will meet twice a year, with the first meeting to be held in Hong Kong in May.
The Chief Executive of HKSAR, Mr Donald Tsang, said, “With the support of the Central Government, Hong Kong has developed into a global hub for offshore RMB business. Banks and financial institutions in London are most welcome to make good use of Hong Kong’s offshore RMB platform. I am delighted that the private sector is taking this important step to foster cooperation between the two financial centres.”
The Financial Secretary, Mr John C Tsang, said, “The launch of the Forum is an encouraging step to enhance Hong Kong’s cooperation with London on the development of offshore RMB business. Enhancing linkages between the two financial centres will help strengthen the status of Hong Kong as the global hub for offshore RMB business.”
The Chief Executive of the HKMA, Mr Norman Chan, said, “By establishing appropriate linkages with Hong Kong’s offshore RMB platform, banks in different parts of the world will be able to provide a comprehensive range of RMB banking and financial services to meet the rapidly increasing demand of their customers. Hong Kong and London are well placed to develop offshore RMB business and closer cooperation between the two financial centres will bring about mutual benefits and a win-win situation.”
In a separate press notice issued by the UK Treasury today, the UK’s Chancellor of the Exchequer, Mr George Osborne, said, “London and Hong Kong are uniquely placed to assist in the development of the offshore RMB market and, further to last summer’s agreement, I am delighted that the financial services industries in both financial centres are working together to achieve this goal.”
The launch of the Forum complements the HKMA’s efforts to promote the use of Hong Kong’s RMB financial platform by corporates and financial institutions in other financial centres, including London, in developing their offshore RMB business. The Chief Executive of the HKMA conducted four overseas roadshows to promote the Hong Kong RMB platform in 2011, including one in London in September.
The HKMA is also working to extend the operating hours of the RMB Real Time Gross Settlement system in Hong Kong to 15 hours, from 08:30 to 23:30 (Hong Kong time) by end-June 2012. This will give financial institutions in London, and other financial centres in the European time zone, an extended window to settle offshore RMB payments through the Hong Kong infrastructure.
The Central Government’s support for the development of Hong Kong as the offshore RMB business centre has been enshrined in the National 12th Five-Year Plan released in March 2011. A series of measures to further support Hong Kong’s development as the offshore RMB business centre was announced during a visit to Hong Kong in August 2011 by Vice Premier Li Keqiang. Vice Premier Li noted that Hong Kong had a natural advantage in developing offshore RMB business, and that it was in Hong Kong’s and China’s need that Hong Kong continued to bring out its long-established unique advantages and play its irreplaceable role in the Mainland’s reform, opening-up and modernisation.
At the China – UK Economic and Financial Dialogue led by Vice Premier Wang Qishan and the UK Chancellor of the Exchequer in September 2011, both sides welcomed the private sector interest in developing the offshore RMB market in London and the growth of the market to date, and agreed to monitor future progress, engaging in bilateral dialogue and dialogue with other authorities, as necessary, to support the market’s future development and address any financial stability risks that may arise.