HK to expand offshore RMB business: chief executive

Hong Kong Chief Executive CY Leung said Wednesday that Hong Kong will consolidate and expand offshore Renminbi (RMB) business, especially in the areas of cross-border RMB trade settlement, and issuance of offshore RMB bonds and securities products.

Delivering his first policy address, Leung noted that Hong Kong has become the largest and most liquid RMB business center outside the Chinese mainland.

Leung said the national 12th Five-Year Plan specifically states the central government is supporting Hong Kong's development as an offshore RMB business center and an international asset management center.

Under "One Country, Two Systems", Hong Kong is an ideal testing ground for steady market reforms of the country's interest rate and exchange rate regimes and its gradual realization of the RMB capital account convertibility, Leung said.

Besides, Hong Hong has played a leading role as the asset management center in the Asia-Pacific region. Leung said Hong Kong will strive to keep the competitive edge and develop into a more comprehensive fund and asset management center.

"While consolidating our traditional strengths, such as providing a platform for initial public offerings, we will also look out for new growth areas, one of which is the development of the commodity futures market", according to Leung.

Leung said Hong Kong is also set to play a crucial role in the internationalization of the mainland's commodity futures market, given the mainland's huge demand for commodities and the gradual internationalization of its commodity futures trade.

"In order to achieve these targets, I will establish the FSDC as proposed in my manifesto immediately," Leung said.

The Financial Services Development Council (FSDC) will provide a high-level and effective platform for stakeholders to explore ways to complement the internationalization of the financial market of China, and help facilitate the further development of Hong Kong's financial services industry.

The policy address is an annual address by the chief executive of the Hong Kong Special Administrative Region.

Leung was elected the third chief executive of the HKSAR in March 2012 and came into office in July the same year. A full term is five years.