Money

HK to further develop offshore RMB business

(Xinhua)
Updated: 2011-02-23 15:21

HONG KONG - Hong Kong will foster the further development of offshore RMB business to enhance the competitiveness of its financial markets, John Tsang said on Wednesday in his budget speech.

Hong Kong will maintain close contact with relevant Chinese mainland authorities as well as the financial regulators and market participants of both sides to further develop Hong Kong's RMB bond market, Tsang said.

There were a total of 31 RMB bond issues with an issuance size of about 74.4 billion yuan ($11.3 billion) as of the end of January.

"We will continue to encourage overseas enterprises to issue RMB bonds in Hong Kong, solicit more Chinese mainland enterprises to issue bonds in Hong Kong and seek the expansion of channels for enterprises to invest in the Chinese mainland with the RMB capital raised in Hong Kong."

Moreover, "we will optimize the RMB clearing platform to attract more enterprises to use Hong Kong's RMB settlement services," Tsang said.

Following the revision of the Settlement Agreement on the Clearing of RMB Business in July 2010, the cross-border RMB trade settlement handled in Hong Kong reached 370 billion yuan last year. At the end of last year, total RMB deposits in Hong Kong exceeded 300 billion yuan.

Hong Kong will also consolidate its position as a platform to raise international capital and enhance the competitiveness of its asset management industry, Tsang said.

The Stock Exchange of Hong Kong Limited (SEHK) will continue to streamline the listing process for overseas companies, shorten the timetable and lower costs, and is studying ways to further facilitate secondary listing of overseas companies in Hong Kong.

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As to the asset management industry, Hong Kong will continue to seek to enter into agreements on the avoidance of double taxation with more trading and investment partners to foster the growth of asset management business, Tsang said. "Stepping up promotion efforts will be high on our agenda in the coming year."

In addition, Hong Kong will also enhance the competitiveness of three other pillar industries, namely trading and logistics, business and professional services and tourism.

Hong Kong will further promote regional co-operation and seize business opportunities brought by the Closer Economic Partnership Agreement (CEPA), and explore the emerging markets more actively to help minimize the impact of a weakening economy in Europe and the US on the city, Tsang said.

Under the CEPA framework, Hong Kong will make continuous efforts to assist its professional services to access the Chinese mainland market. On the other hand, "we will continue to allocate resources for the building of tourism hardware and software, enabling tourists to experience the vibrancy and hospitality of Hong Kong as Asia's world city throughout the year," he said.