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Hong Kong's Offshore Yuan Market Becomes Global Funding Hub

Bloomberg Markets •
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Hong Kong's offshore yuan market is evolving into a global funding hub, with a record pile of yuan driving corporate loans and capital market activity. Agnes Chan Sui-kuen, chairman of the Hong Kong General Chamber of Commerce, said Hong Kong "stands as the world's largest offshore renminbi hub, processing about 75 percent of all transactions" and will play a crucial role in the renminbi's internationalization.

Chan Chun-ying, Legislative Council finance representative and NPC deputy, emphasized building links with Belt and Road Initiative countries for asset management, green finance and risk management. He advocated for a cross-border regulatory model in the Greater Bay Area, including a Bay Area financial regulatory coordination agency. Fintech adviser Oriol Caudevilla backed this, noting Hong Kong's role as a financial hub alongside Shenzhen's technological prowess, and its push for digital assets and Web3.

Billy Mak Sui-choi, associate professor at Hong Kong Baptist University, highlighted Hong Kong's importance in three aspects: renminbi internationalization, corporate fundraising, and asset and wealth management. He noted challenges in reviving the equity market due to low US and European capital appetite for mainland stocks. Both Mak and Chan urged product diversification with more yuan-denominated products and market diversification targeting Middle East, ASEAN and BRI investors.