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Chinese authorities have long sought to boost their currency's international profile. Now, some new plans focus on using Hong Kong's finance market to meet that goal.
Chinese Vice-Premier Li Keqiang made statements Wednesday calling for closer economic ties between mainland China and Hong Kong. The semi-autonomous city is formally part of China, but has its own government, institutions, and currency.
But Li suggested that China would promote Hong Kong as the main offshore center for the Mainland's yuan, also called the renminbi.
[Li Keqiang, Chinese Vice-Premier]:
"(We will) support Hong Kong in developing itself into an offshore renminbi centre. Hong Kong enjoys a natural advantage in developing the offshore renminbi business. The central government will actively support the growth of the renminbi market in Hong Kong, expand renminbi circulation channels between Hong Kong and the mainland, and support the innovation and development of offshore renminbi financial products in Hong Kong."
In practice, this will mean creating and selling finance instruments denominated in renminbi, and putting them on the shelves for investors in Hong Kong. Bundles of loans, stocks, bonds, and other value-accruing investments will be developed and put up for sale.
Li did not say when the plan would be launched, but it addresses a long-standing problem: Many foreign investors have been reluctant to hold high quantities of Renminbi, due to a lack of attractive investment options. The Hong Kong plans are aimed to have more investors trade their dollars, yen, or euros for "redbacks" bearing Mao Zedong portraits.