Hong Kong to play indispensable role in rising global RMB demand
As the first offshore market to launch RMB business since 2004, Hong Kong has become the global hub for RMB trade settlement, financing and asset management, offering a wide range of RMB products and services to meet the needs of businesses, financial institutions, and investors.
With RMB being a stable currency and increasingly used as a global reserve currency, investors are increasingly diversifying into RMB-denominated financial products.
On the investment front, 60 percent of foreign direct investment to the Chinese mainland flows through Hong Kong. Vice versa, around 60 percent of overseas investments by made Chinese mainland companies are channeled through Hong Kong.
With such a unique scope and capacity in dealing with RMB transactions, Hong Kong stands at the forefront of developing innovative RMB assets.
Hong Kong has huge potential in innovation of RMB products as Hong Kong maintains a huge RMB pool with biggest investment demand for CNH (the Chinese Yuan traded in the offshore market, such as Hong Kong), and the south bound investments also seek yield and differentiation in Hong Kong, which will push the market to provide new ideas on products, said Rick Wen, Deputy Head of Fixed Income Investment, ICBC Asset Management Global.
Hong Kong is a mature and sophisticated economy full of opportunities, both on the consumer side and the business side. Coupled with the bigger opportunity in the Greater Bay Area, many companies use Hong Kong to cover ASEAN countries and achieve operations across Asia, said Stephen Phillips, Director General of Investment Promotion at Invest Hong Kong.