What will a stronger international financial centre look like for Hong Kong? Doubling down on yuan internationalisation is a key focus, experts say in this second of our five-part series on the city’s first five-year blueprint. Read part one here.
With a symbolic press of a button, top officials and securities regulators from Hong Kong and mainland China earlier this month marked a historic moment for the city’s financial markets.
The August 3 launch of the first offshore Chinese government yuan-denominated bond futures contract, along with related cross-border policies, underscored what Beijing called a critical upgrade of Hong Kong’s status as the country’s largest offshore yuan trade-settlement market.
The milestone comes as Chief Executive John Lee Ka-chiu prepares to deliver the city’s first five-year plan aimed at aligning with national development.
A key theme is on reimagining the economy, finance and trade and in this, analysts say, Hong Kong will have to do much more to raise its status as an international financial centre.
This is why the August 3 launch was momentous. It will give a longed-for shot in the arm to Hong Kong’s mandate from Beijing to help globalise the yuan and strengthen the city’s position as an international financial centre, according to business leaders.
Market participants and policy experts, meanwhile, have called for expanded yuan products, commodity trading infrastructure, a diversified talent pool and fintech innovation to reinforce Hong Kong’s capacity to channel global capital into the country while mitigating geopolitical and currency risks.