In response to a question in the Legislative Council on the increasing competition from other financial centers, the Secretary for Financial Services and the Treasury, Professor K C Chan, has confirmed that the government will continue to promote the services that Hong Kong as a global offshore RMB business center provides for corporates and financial institutions.
Chan pointed out that, with the wider use of RMB in cross-border trade, the demand for RMB financial services from overseas individuals and corporates will increase gradually, and that it is a natural development that overseas financial centers are making efforts to promote RMB business.
However, he said that, along with that competition come business opportunities for banks and financial institutions in Hong Kong. For example, Hong Kong's banks will be allowed more room for developing RMB business with overseas banks, such as the provision of RMB correspondent banking and inter-bank lending services.
With regard to the increasing RMB business in Taiwan, the monetary authorities of the Mainland and Taiwan signed the Memorandum of Understanding on Cross-strait Currency Clearing Cooperation (MoU) in late August last year. It was agreed that the two sides will establish a cross-strait currency clearing mechanism based on the principles and co-operation framework laid down in that MoU, but details of the clearing arrangements have yet to be announced.
The government has also been closely monitoring the development ...