China’s global yuan goals aided by RCEP trade deal, Hong Kong’s role as ‘super connector’, top banker says
- Asia-Pacific trade deal will expand international use of yuan by lowering financial market barriers, says Li Haiying, managing director of renminbi business at Bank of China (Hong Kong)
- Under the trade deal and the Belt and Road Initiative, Hong Kong can play connecting role for yuan-related financial activities, says Li
The world’s largest free-trade agreement involving China and 14 other Asia-Pacific countries sets the stage for greater yuan internationalisation, according to a top banking executive, who says Hong Kong can play “super connector” role among members for yuan-related financial activity.
Li Haiying, managing director of renminbi business at the Bank of China (Hong Kong), said the Regional Comprehensive Economic Partnership (RCEP) had enhanced economic ties between China and other members.
“RCEP has lowered the entry threshold for financial markets, which helps expand the use of the renminbi,” Li told the South China Morning Post, using the official name of China’s currency.
The RCEP free-trade agreement covers nearly a third of the global population and about 30 per cent of global gross domestic product, though this is expected to rise to 50 per cent by 2030. 10 Association of Southeast Asian Nations (Asean) members plus Australia, China, Japan, New Zealand and South Korea have signed onto the deal.
Since it came into effect at the start of the year, Li said some RCEP members have increased their yuan reserves, while others have established bilateral swap arrangements, like the one launched between China and Indonesia in September.
