Hong Kong tipped to be world’s top financial centre amid global yuan expansion plan Hong Kong could emerge as the world’s leading financial centre as the central government pushes to internationalise the yuan – a move that will advance the nation’s development under the 15th five-year plan while also driving the city’s own growth, a National People’s Congress (NPC) deputy has said. Li Yinquan said the city stood to benefit from increased capital as the yuan became more internationalised, since most global renminbi reserves and transaction volumes would naturally be held in Hong Kong. “As long as the stock, flow and trading volume are mostly in Hong Kong, this is a very huge benefit for Hong Kong,” the veteran financier told the South China Morning Post on the sidelines of the annual “two sessions” political gatherings in Beijing. “If China becomes the world’s largest economy and … a financial powerhouse, the proportion of international renminbi among international currencies rises, and with the growth of the Chinese economy, at that time, Hong Kong may become the number one international financial centre in the world.” Yuan internationalisation was a key focus of the national 15th five-year plan unveiled on Thursday during the two sessions. The draft plan explicitly stated that Beijing would support Hong Kong in strengthening its roles as a global offshore renminbi business hub and an international asset and wealth management centre. Hong Kong ranks third among the world’s leading financial centres, behind New York and London, according to the Global Financial Centres Index. Li said mainland China’s central bank, rather than the Hong Kong government, would be tasked with establishing an international renminbi issuance and repatriation mechanism. Beijing has been promoting the use of the yuan in global trade settlements for more than a decade, though its broader international presence remains limited, according to previous government data. In December last year, daily transactions cleared through China’s Cross-Border Interbank Payment System averaged around 700 billion yuan (US$101 billion) – a significant figure, but still small compared with nearly US$2 trillion processed daily through the US dollar-based Clearing House Interbank Payments System, according to Oxford Economics. Li noted that the country’s efforts to develop a new currency mechanism were not aimed at challenging the United States or replacing existing global clearing systems, adding that China still recognised and benefited from current international financial networks. Swift – the Society for Worldwide Interbank Financial Telecommunication – is a global provider of secure financial messaging services spanning more than 200 countries and territories, serving more than 11,500 institutions worldwide. It is headquartered in Belgium. Financial Secretary Paul Chan Mo-po said on Monday at the SCMP’s “Redefining Hong Kong 2026: Budget Edition” conference that the city currently held deposits of around 1.4 trillion yuan. “At the moment, in terms of trade, the proportion of renminbi is still small although it increased by more than 100 per cent over the past two years,” he said. “So for us, to develop the renminbi market is a must, not just to serve the mainland national development objective but also good for ourselves, because this is the defining advantage the other [international financial centres] cannot match.” However, he said the city needed to “strengthen the liquidity” and “enrich our product offerings”. Legislative Council and Chinese People’s Political Consultative Conference (CPPCC) member Johnny Ng Kit-chong said Hong Kong was well positioned to climb the global rankings by actively developing its offshore currency and international capital functions. NPC deputy Rock Chen Chung-nin said the city must expand its renminbi capital pool beyond 1 trillion yuan and increase the scale of cross-border connection schemes to deepen bond issuances and provide more renminbi assets for international investors. US Treasury Secretary Scott Bessent told a Senate committee in February that he “would not be surprised” if China was already exploring ways to challenge American pre-eminence in digital assets, given Hong Kong’s efforts to develop the sector. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3346011/hong-kong-tipped-be-worlds-top-financial-centre-amid-global-yuan-expansion-plan?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post