Premier Wen Jiabao reiterated Beijing’s support for Hong Kong to become the RMB offshore center, suggesting that Hong Kong should lead China’s financial reform. According to Hong Kong’s monetary authority, in 2010, a total of 36 billion yuan (US$5.5 billion) in RMB bonds were issued. China Merchants Bank President Ma Weihua said earlier this month that Hong Kong’s RMB deposits totaled 370.6 billion and may hit 2 trillion in five years.
Ba Shusong, a senior official at the Financial Research Institute under the State Council’s Development Research Center envisions a three-step process: 1) establishing channels for RMB inflow and outflow, with partial convertibility overseas; 2) setting up an offshore market in Hong Kong where RMB can circulate inside the region independently from the mainland; 3) Attracting RMB from Russia and Africa back to Hong Kong. Ba believes that if RMB deposits reach 2 trillion in Hong Kong, it will likely achieve self-circulation and Hong Kong will thus truly become the RMB offshore center.
Source: Chinese News Service, March 31, 2011
http://www.chinanews.com/cj/2011/03-31/2941967.shtml