Govt looking at ways to expand renminbi usage: Hui

Christopher Hui, the Secretary for Financial Services and the Treasury, revealed on Friday that the government is exploring additional ways to expand the usage of the renminbi. This move aims to promote the adoption of the national currency and mitigate risks associated with fluctuating exchange rates. Earlier in the week, Chief Executive John Lee announced in his Policy Address that the government would actively promote the use and globalisation of the yuan.

Hui shared that the government has already been receiving renminbi through various channels, such as issuing yuan-denominated bonds. Plans are also underway to enable residents to pay stock stamp duties in renminbi and to include RMB counters under the Southbound Stock Connect Scheme to stimulate more renminbi transactions. To alleviate concerns about exchange rates, the government intends to investigate scenarios where the renminbi can be used to settle payments for projects related to water imports or training sessions involving mainland institutions.

Hui emphasized that this approach is about striking a balance between receivables and payables, which is a natural and logical process. Additionally, the Hong Kong Exchanges and Clearing will reveal new renminbi-denominated, physically settled gold futures contracts this year, as investors increasingly seek diverse investment products.

The government's expansion of financial services using the yuan, including short-term financing, will also be covered in the Policy Address. Furthermore, the Hong Kong Monetary Authority will link the Faster Payment System (FPS) with UnionPay, enabling individuals to make purchases in yuan.