Hong Kong Welcomes Pilot Program for Settlement of Overseas
Direct Investments in RMB
For more information, please contact:
Melissa Ng / David Hsieh at 212-752-3320
Daniel McAtee at 202-238-6360
Wing Yan Tong at 415-835-9315
January 13, 2011 - The Hong Kong Monetary Authority (HKMA) welcomed the announcement by the People’s Bank of China today of a pilot program for the settlement of overseas direct investments in Renminbi (RMB).
Under the pilot program, Mainland enterprises, upon approval by the relevant Mainland authorities, can conduct direct investments overseas using RMB. Moreover, the Hong Kong branches and correspondent banks of Mainland banks can obtain RMB funds from the Mainland and extend RMB lending to the enterprises conducting the investments.
Hong Kong has long been the prominent platform for the Mainland of China’s outward direct investments. In 2008 and 2009, the Mainland’s outward direct investments amounted to US$55.9 billion and US$56.5 billion respectively, of which 69 percent, or US$38.6 billion, and 63 percent, or US$35.6 billion, was invested in Hong Kong or through Hong Kong to other parts of the world.
Upon implementation of the pilot program, Mainland enterprises can conduct such investments through Hong Kong’s offshore RMB center, and at the same time make use of the multi-currency and multi-functional financial platforms in Hong Kong for the related financing and fund management activities.
The Chief Executive of the HKMA, Norman Chan, said, “The launch of the pilot scheme for the settlement of overseas direct investments in RMB will further enhance the circulation of RMB funds for trade and investment activities. This will be conducive to the development of Hong Kong’s offshore RMB market, particularly in supporting real economic activities conducted in RMB and thereby playing an active role in the greater use of RMB outside the Mainland.”
Hong Kong Monetary Authority: www.info.gov.hk/hkma/