Agreement should pave way for more renminbi investment opportunities

Investment channels for renminbi clearance need to be further opened up to develop the trade settlement between Hong Kong and China on renminbi investments, say counsel.

An agreement was signed recently between the mainland's central bank, the People's Bank of China and Bank of China, Hong Kong's renminbi clearing bank, to further lift restrictions on the renminbi clearing business. Now, corporations and individuals will be able to go through the banks to make renminbi payments and transfers, limitations have been removed in the establishment of renminbi accounts, and more renminbi-denominated financial intermediary activities will be introduced.

Nigel Ward, a Beijing-based Norton Rose partner believed that the move will promote the liquidity of the Chinese currency in Hong Kong and makes the related inter-bank business feasible. “These developments will provide more opportunities for foreign investors to receive revenue in renminbi and take advantage of its widely-predicted potential for appreciation,” he said.