Jack Yang Jiewen (right) and E Zhihuan of Bank of China (Hong Kong) elaborate on the bank’s strategies to promote renminbi internationalization at a Thursday interview with China Daily. (oswald chan / China daily)
For Hong Kong to realize its vision of renminbi internationalization, the city needs to enrich the ecosystem of renminbi financial products, improve the market infrastructure, and leverage its connectivity role to promote the use of the Chinese currency.
Jack Yang Jiewen, RMB business executive director at Bank of China (Hong Kong), made the remarks to China Daily in an interview on Thursday.
As the sole clearing bank for renminbi business in Hong Kong and as the world’s largest clearing bank for renminbi business, BOCHK pays great attention to the work of promoting renminbi internationalization, Yang said.
“The bank strives to construct and refine the ecosystem of renminbi financial products in Hong Kong and Southeast Asian countries to promote more renminbi transaction and product innovation.
“In promoting the renminbi business, we adopt the customer-centric approach whereas we will provide an array of diversified renminbi products in financing and risk management based on clients’ patterns in the usage of renminbi,” Yang said.
Looking ahead, BOCHK will focus on four main areas to promote the Chinese currency, Yang said.
First, the bank will leverage its role in the renminbi clearing business. Yang said the amount of renminbi clearance by BOCHK reached a record high of 384 trillion yuan ($53.02 trillion) in 2022, an increase of 7 percent over the previous year. In terms of cross-border trade settlement, the amount reached 4 trillion yuan in the first five months of this year.
BOCHK will proactively conduct market research and provide to clients in-depth and updated market analyses about the market trend of the renminbi so that clients can gradually adopt the Chinese currency in their business operations in an orderly manner, he said.
The bank also proactively plays a vital role in various financial connectivity programs in areas of mechanism, processes, system infrastructure, and planning of cross-border capital flows.
Lastly, BOCHK will leverage the resources of its parent company — Bank of China — to promote the development of the real economy so that use of the renminbi can be enhanced in areas of cross-border renminbi financing businesses such as panda bond issuances, dim sum bond issuances, the cross-border renminbi liquidity pool, and initial public offerings, Yang said.
The executive director highlighted that Southeast Asian countries will be the bank’s priority to promote renminbi business. The bank has selected certain industrial parks in these countries to provide renminbi clearance and investment and financing services for clients in the business sectors of large commodity and contracting works.
“For Hong Kong to propel renminbi internationalization, the city should enhance the product ecosystem in investment, financing, transaction and risk management, as well as improve the current market operation,” Yang said.
He added that Hong Kong should further extend its connectivity role to connect the Chinese mainland, Southeast Asian nations and even Belt and Road countries to promote the use of the renminbi.
E Zhihuan, chief economist at Bank of China (Hong Kong), said in the post-COVID-19 pandemic era, Hong Kong will have economic transformation opportunities in green transition finance, digital economy, financial technology, wealth management and cross-border consumption.
On a broader perspective, the Northern Metropolis plan can resolve the long-term development of Hong Kong. Coupled with the country’s 14th Five-Year Plan (2021-25), the Belt and Road Initiative, and Hong Kong’s proposed entry into the Regional Comprehensive Economic Partnership will provide growth engines for Hong Kong’s economy, she added.
