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Hong Kong as China's global financial centre
Monday 5 September 2011 - by Will Henley
Julia Leung, Hong Kong's under-secretary for financial services and the treasury, says that as China experiments with the international liberalisation of the renminbi, Hong Kong is the ideal 'laboratory' for testing the acceptability of RMB assets among international investors.
Hong Kong has long been considered one of the premier financial centres in the Asian time zone.
We are strategically positioned as China's global financial centre, and that positioning has received a further boost by the August visit of Vice-Premier of the State Council, Mr Li Keqiang.
During his visit, Vice-Premier Li announced 36 measures to support Hong Kong's social and economic development. Of the total, 13 are related to financial services, reflecting the support of the central government to strengthen Hong Kong's position as an international financial centre.
At the Forum on the National 12th Five-Year Plan and Economic, Trade and Financial Co-operation and Development Between the Mainland and Hong Kong, Vice-Premier Li said: "Hong Kong should grasp the opportunity offered in the process of the renminbi playing an increasingly important role in the international monetary system and consolidate its status as an international financial centre, which is also one of the strategic priorities of the National 12th Five-Year Plan."
The opportunity refers to the development of Hong Kong as an offshore renminbi business centre, which also signifies the importance the Central People's Government attaches to using Hong Kong as the testing ground for the Mainland's financial market liberalisation.
The measures recently announced would, among other things, increase supply of bonds issued by the Mainland financial institutions and enterprises. This is for a mutually beneficial objective - a quickened pace of development in offshore renminbi business in Hong Kong would help renminbi gain wider acceptance in its use overseas.
In 1978 when the Mainland embarked on the economic reform with the establishment of the four special economic zones, it set the first special zone in Shenzhen, which borders on Hong Kong.
Hong Kong, being the freest and most international market in all of China, has played an important role in exporting capital and talent to support the Mainland's economic liberalisation.