Xu Zhengyu: I hope to implement the RMB trading counter as soon as possible to integrate into Southbound Connect

The Zhitong Finance App learned that the Hong Kong Securities Regulatory Commission revealed that preparations are being made to include RMB trading counter stocks in Southbound Connect. The goal is to land before July 1 next year. The Secretary for Financial Services and the Treasury, Mr Hui Ching-yu, said on a radio program that he has always been in close communication with mainland regulators. The integration of the RMB counter into the Southbound Link requires system updates and technical arrangements. He hopes to launch it as soon as possible, which is beneficial to both markets and investors.

Hong Kong's “Five-Year Plan” proposes to promote payment of government expenses in RMB. Xu Zhengyu said that he hopes that the RMB scenario will match the RMB scenario. In addition to the expected increase in the scale of RMB collection and use in the future, the RMB counter will be integrated into the southbound channel, which will allow mainland investors to buy stocks and pay stamp duty in RMB.

He mentioned that currently the government also uses RMB to pay expenses, such as paying mainland medical institutions for the medical voucher scheme. In the future, it will study the payment of Dongjiang water and water bills in RMB, as well as civil service training services provided by mainland institutions. He emphasized that while the government collects taxes in Hong Kong dollars, government expenses are still mainly paid in Hong Kong dollars, and the proportion of RMB payments will not be very high.

Regarding whether the use of RMB payments will cause exchange losses or affect the joint exchange system, Xu Zhengyu pointed out that the two are unrelated. He emphasized that this is not a qualitative change. Hong Kong is the largest offshore RMB center outside the country, and the relevant mechanism has always existed. He also indicated that the government has always issued multi-currency bonds, including RMB. He emphasized that exchange rate management is part of regular financial management, and there is no concern about related work.

Furthermore, Xu Zhengyu pointed out that the seven-day offshore RMB liquidity bidding mechanism and the issuance of offshore RMB short-term debt instruments are all supporting measures to increase the circulation and liquidity of overseas RMB. He pointed out that the real economy is shifting from the West to the East, and top-level financial activities and allocations should also cooperate accordingly to increase the circulation of RMB. When more institutions are willing to use RMB, investors can make more convenient and reasonable arrangements to obtain RMB for investment and financing.