While Hong Kong remains the leading offshore RMB (Yuan, or CNY) centre in the world, there are recent changes that help make offshore RMB market in Singapore more competitive.
Singapore as an Emerging offshore RMB centre
On 8 February 2013, Monetary Authority of Singapore (MAS) announced that People's Bank of China (PBoC) already appointed Industrial and Commercial Bank of China (ICBC Stock Codes: 1398.HK for H-shares and 601398.SH for A-shares) officially as RMB clearing bank inSingapore. This action will certainly increase the size of RMB liquidity pool in Singapore and will speed up the development of offshore RMB market there.
It is the first time Bank of China (BOC Stock Codes: 3988.HK for H-shares and 601988.SH for A-shares) is not selected as RMB clearing bank outside mainland China. Bank of China (BOC) is the sole RMB clearing bank for Taiwan and Hong Kong regions. Now the decision of PBoC (People's Bank of China) clearly shows that Industrial and Commercial Bank of China (ICBC) Singapore branch has broken the exclusive clearing status of BOC in overseas RMB business.
Although Hong Kong is still the biggest offshore RMB centre in the world with a large RMB deposit base outside mainland China, other regional emerging hubs such as Singapore, London and even recently Taiwan are now becoming more and more competitive.
From competition of Dual-Currency IPO between Singapore and Hong Kong, it is quite obvious that foreign exchange (forex) business is a weakness for Hong Kong financial market.
Therefore, it is advisable that Hong Kong shall further develop its forex trading business in order to maintain its status as.the leading offshore RMB center worldwide.
Written by: Independent Internal Audit Team (IIAT) / MrChina
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