The first meeting will take place in Hong Kong in May 2012 and, in June, the HKMA is preparing to significantly extend the operating hours of its RMB payments systems to better accommodate London- and other European-based institutions, making it easier for them to use the platform in Hong Kong to conduct offshore RMB settlement.
The establishment of the forum marked a big progress for London in its initiative to become an offshore RMB center. In a press release issued the same day by the HM Treasury, George Osborne, Chancellor of the Exchequer, welcomed the announcement. "London and Hong Kong are uniquely placed to assist in the development of this exciting market, Mr Osborne said. am delighted that the financial services industries in both financial centers are working together to achieve this goal."
Although London is a world-class financial center, Hong Kong seems to welcome the challenges coming from London. In a press release issued by the HKMA, its Chief Executive, Norman Chan, said y establishing appropriate linkages with Hong Kong offshore RMB platform, banks in different parts of the world will be able to provide a comprehensive range of RMB banking and financial services to meet the rapidly increasing demand of their customers. Hong Kong and London are well placed to develop offshore RMB business and closer cooperation between the two financial centers will bring about mutual benefits and a win-win situation. ?/p>
KC Chan, Hong Kong's Secretary for Financial Services and the Treasury, told reporters at the Asian Financial Forum that, despite other emerging financial centers, Hong Kong remains the most important. he first step of RMB in the oing-out initiative is through Hong Kong; However, it's not enough to rely on Hong Kong for all banking services, he said. he best way is to use Hong Kong as a financial center to launch services in cooperation with other jurisdictions; there is every reason to believe that Hong Kong is still the biggest and the most entered offshore RMB center. br />
Due to the fast growth of the offshore RMB markets, London, New York, Singapore and other financial centers have shown keen interests in becoming offshore centers for the currency. Among them, only London won official support from China last year.
However, Singapore is also considered a popular candidate in the competition to become an offshore RMB center. OCBC economist Xie Dongming wrote an article for the Financial Times summarizing Singapore's advantages: As the only international financial center in the ASEAN, the RMB business in Singapore can serve the ASEAN region with a population of more than 500 million; Singapore is the second largest foreign exchange trading center in Asia after Tokyo and it has forex expertise and mature professionals; The status of Singapore as a global private banking and asset management center as well as a hub for commodities trading can help promote the use of RMB worldwide; Singapore is geographically and politically independent from China and is able to play a role as a bridge connecting the East and the West.
In comparison, London was ranked first in the 2011 Global Financial Centers Index. It's the world's biggest offshore US dollar market and the world's largest foreign exchange transaction center. Mark Hoban, UK's Financial Secretary to the Treasury, said confidently at the China Forum organized by the City of London that "we believe that London provides the ideal complement to Hong Kong, drawing on our world leading expertise, competitive business environment, market depth and European time zone to become the Western hub for offshore RMB market."
This sentiment is echoed by London Asian counterparts, with Hong Kong's Wen Wei Po saying in an analysis piece that the primary consideration of cooperating with London is that the European Union is China's biggest trading partner, so its use of RMB in trade settlement can bring huge business opportunities.
However, People's Bank of China Governor Zhou Xiaochuan denied there is a timetable for the full convertibility of the RMB during the fourth Sino-British Economic and Financial Dialogue. Even if London is ahead of other financial centers, it is still futile to talk about it becoming a real offshore RMB center before the currency is fully convertible.
