At end-2009, RMB bank deposits stood at just over 60 billion yuan (about HK$73 billion). By end-July, these deposits had exceeded 570 billion yuan, according to Hong Kong Monetary Authority (HKMA) figures. Yuan deposits now account for 10 per cent of the city's total deposits.
The speedy growth of yuan deposits and the fact that Hong Kong's stock market is an important fund-raising channel for mainland companies have uniquely positioned the city as a testing ground for China's financial liberalisation. This includes promoting the greater use of renminbi for cross-border transactions.
Not too long ago, the renminbi business scheme covered mainly banking services for personal customers, such as deposit-taking, currency exchange, remittances and debit and credit card services. Today, companies around the world are entitled to hold renminbi accounts, while local banks are allowed to create renminbi-denominated investment products and provide conversion services.
"A couple of years back, we saw Chinese companies coming to Hong Kong asking for more trade finance as an extension to their business here. But nowadays, we see more corporates using their subsidiaries in Hong Kong as a financing platform for the whole group. It shows a shift in operations and reflects the liquidity situation on mainland China. All in all, it means there are more opportunities for banks in Hong Kong," said Frank Fang, director of Greater China corporates, commercial banking, at HSBC. He was speaking at the Hong Kong Institute of Bankers (HKIB) third Annual Banking Conference on September 27.
Around 130 authorised institutions in Hong Kong are currently engaged in renminbi business. As China's economic reform progresses and diversifies, the renminbi dimension will be an important area of future development for the institutions who also need to meet the demands of providing broader service with a better human resources (HR)