The Best of Chinese Commentators

Renminbi internationalisation and financial centres

  • Published 17 Nov 2011

So far, most of the action in quest to “internationalise” of the renminbi currency has taken place in Hong Kong and it is not the renminbi itself that is being internationalised but the “redback”, the offshore renminbi, which is not freely interchangeable with the mainland currency. Therefore, the question arises: Does the rise of the offshore renminbi reinforce Hong Kong’s position as China’s financial centre or will it eventually enhance Shanghai’s prospects too?

Dr. Fang Xinghai, director general of Shanghai Financial Services Office, acknowledged the position of Hong Kong as the financial centre of Greater China and said Shanghai needs more effort to improve its education, human resources and infrastructure. More importantly, Shanghai has to bring its financial regulation and institutions in line with global counterparts. He said more innovation was needed in the hedge fund, private equity and investment management industries to create more competitive institutions.

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