Bach Shu Song: Hong Kong actively contributes to the development of the offshore RMB market

"We have seen great progress in the internationalization of the renminbi, from trade settlement to investment pricing, especially now that the capital account for more than 70% of the cross-border settlement of the renminbi, mainly driven by Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, bond stock connect and so on." Speaking of RMB internationalization, HKEX Managing Director and Chief China Economist Ba Shusong said at the 2021 Financial Street Forum Annual Conference that although Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and Bond Connect have promoted the opening up of financial markets, this is only the first stage of RMB internationalization.

Ba Shusong believes that in the context of zero interest rates and negative interest rates in major global currencies, the renminbi has great attractiveness to global investors, but to truly become an international currency, it also needs certain policy support, including the development of the offshore renminbi market, encouraging investors to trade with renminbi, and expanding the circulation and use of renminbi in the world.

In addition, the internationalization of the renminbi can also be expanded to more fields, including commodity trading, derivatives, etc. For example, Ba Shusong said that the cross-border RMB settlement in the Greater Bay Area is very successful, and is currently encouraging individuals in the Greater Bay Area to invest in banking wealth management products through the "cross-border wealth management pass", compared with the risk of higher risk stocks, the bank wealth management risk is low, coupled with the financial regulatory authorities, there is still a lot of room for development in the future.

Ba Shusong also mentioned that in recent years, while globalization has become more difficult, regional cooperation has become the mainstream, and in the context of Southeast Asia becoming China's largest trading partner, it can take advantage of the trend to promote currency internationalization. "China's large number of industries are migrating to Southeast Asia, which provides an opportunity to promote the denominated settlement of the renminbi in Southeast Asia, and China's application to join the CPTPP will objectively continue to promote the internationalization of the renminbi."