Yuan will gain currency

YESTERDAY the People's Bank of China andBank of China (Hong Kong) Limited signed arevised Settlement Agreement on the Clearingof Renminbi Businesses. That began a new chapter.Yuan services will be more widely used and moreyuan yuan--denominated financial products will be availableto investors in the territory. That is also a crucial step inturning Hong Kong into an offshore yuan centre.

The revision of the Settlement Agreementrepresents a major breakthrough. Under the revisedagreement, all businesses may hold yuan accounts inthe SAR. There are no restrictions on the amount ofyuan a business may buy. Yuan may be transferredfrom an account with one bank into one with anotherand from a company's account into a person's.

More yuan services will become available in HongKong because the central government has decidedthat experiments should be carried out in the territoryin making the yuan freely convertible and turning it intoan international currency. What Hong Kong needs todo is to help implement this policy. As China attachesparamount importance to financial security, citizensmay think yuan services are introduced here at a slowpace. However, if one reviews what has happenedover the past few years, one may see the marks theyuan has left in "going out" step by step via Hong Kong.

A Hong Kong citizen may exchange his HongKong dollars for 20,000 yuan a day at most. In July lastyear, the mainland allowed the use of the yuan tosettle cross cross--boarder trade with Hong Kong. The totalyuan trade settlement via Hong Kong reached 23.6billion yuan. Though the amount is not very high, ittrends upward. For example, Peter Wong, CEO of theHong Kong and Shanghai Banking Corporation Ltd,Asia Asia--Pacific, expects the total to accumulate to nearly100 billion yuan towards the end of this year and reachseveral trillion yuan in the next five years. Moreover,last month the central government increased thenumber of provinces allowed to use the yuan to settletrade to twenty. Eventually, all mainland businessesmay use the yuan to settle trade with all places. Thereare indications that the yuan will gradually gaincurrency outside the mainland. If Hong Kong improvesits infrastructure, makes proper arrangements forsettlement and clearance and effectively solvesproblems that may arise, experience related to theyuan's free convertibility will grow, and it will have suchstrength as to become irreplaceable as an offshoreyuan centre. The process may be protracted protracted..

However, when such efforts bear fruit, Hong Kong willhave a place in the global financial setup.

The yuan is gradually moving towards fullconvertibility, and Hong Kong has a part in theprocess. The SAR government should be aware that itwill inevitably become an international currency. It thusfollows that it should consider how Hong Kong can relyon its advantageous status to benefit from the yuan'sappreciation. As of the end of last May, the ExchangeFund amounted to about HK $2.2 trillion, includingUS $145.7 billion in US Treasuries. Becaus of t the helinked exchange rate system, Hong Kong has to holdUS Treasuries. However, it seems odd that, thoughHong Kong has much closer ties with the mainland,there are no yuan yuan--denominated assets in the portfolioof the Exchange Fund.

Ordinary citizens are keen on exchanging theirHong Kong dollars for yuan in the hope of profitingfrom its appreciation, and they look forward to earningbetter returns with yuan yuan--denominated financialproducts. Clearly, it is time the SAR government(which is in a favourable position) put includingyuan yuan--denominated assets in the portfolio of theExchange Fund on the agenda.

明報社評2010.07.20

人民幣與港人生活愈來愈接近

中國銀行（香港）有限公司與中國人民銀行昨日簽署修訂《清算協議》，為人民幣業務在港愈趨普遍，揭開新一頁，不但將有更多人民幣產品讓市民投資，就促使本港發展成為人民幣離岸中心，也跨出重要一步。

修訂後的《清算協議》，有一個重大突破，就是不限行業，所有企業都可以在港開設人民幣戶口，兌換人民幣也不設上限；人民幣戶口可以實現跨行轉帳，企業戶口也可以轉帳至個人戶口。

中國的資本帳市場仍未開放，本港人民幣業務範疇漸次增加，乃國家所定下人民幣自由兌換、成為國際貨幣進程的試點，本港要做的是配合政策。基於中國首要考慮金融安全，人民幣業務在港開展步伐，以港人的角度，無疑覺得較緩慢，但是回顧過去數年曆程，可以看到人民幣借助香港，一步一腳印走出去的足跡。

除了每日兌換上限22 萬元，去年77 月，本港獲准進行跨境人民幣貿易結算，至今年66 月，結算總額達236 億元人民幣，數字雖然不算多，但是處於上升趨勢，例如匯豐亞太區行政總裁王冬勝預期，今年底前經香港進行的貿易結算金額，可累積至近千億元，未來55 年或增至數萬億元人民幣。另外，中央于去月已批准把跨境人民幣結算境內試點，擴大至20 個省份，境外試點亦會擴至所有國家，情況顯示人民幣在境外的流量會逐步增加， 如果本港在有關基建、交收、結算計價等各個範疇安排及操作得當，並改善過程中衍生出來的問題，不但可以為人民幣自由兌換累積經驗，也可以為本港成為人民幣離岸中心逐步建立不可取代的地位。過程雖然漫長，但是到開花結果之日，香港在全球金融整體格局中，就有一席之地。

人民幣逐步邁向自由兌換，本港參與其事，特區政府對於人民幣必然成為國際貨幣，應該有所領會，然則，本港如何利用地位優勢，在人民幣升值中得到利益，是政府應該考慮的方向。例如截至55 月底，本港外匯基金總額約2.2 萬億港元，其中美元國債資產占1457 億美元，基於聯繫匯率，本港有必要買美債，但是與本港各方面關係更重要的中國大陸，外匯基金的組合中，卻缺少人民幣計價的資產，使人感到有點奇怪。

當市民都知道把港元轉為人民幣存款，收升值之利，或等待人民幣投資產品，以賺取更大回報之時，近水樓台的特區政府把人民幣資產納入為外匯基金組合，看來應該引入議事日程了。

Glossary

paramount //''ppaarr ???ma ʊʊnt/ nt/supreme, requiring first consideration.

protracted /pr ??''tr traakt ktIId/ d/lasting longer than expected.

have a part inbe involved in.