Hong Kong's position as a test bed for the internationalisation of the renminbi has had a profound impact on the banking sector. Apart from the far-reaching implications for companies and financial institutions providing renminbi services, employment prospects in the industry have also benefited greatly.
"The increasing use of RMB for cross-border trade and investments provides opportunities for both 'generalists' who have broad knowledge of the banking industry in Greater China and 'specialists' with deep understanding of specific areas," says Joe Ng, vice-president and head of renminbi payments product management, global transaction banking at Deutsche Bank.
These specific areas include international payments market infrastructure, cross-border trade, finance and cash management, foreign exchange, and debt and equity capital markets.
As the internationalisation of the yuan continues to be a driving force for cross-border trade and investments between China and the rest of the world, it is crucial that Hong Kong sustains its dominant position as leader of the offshore renminbi centre. As such, understanding the driving forces behind the market is crucial, experts say.
The renminbi is poised to be one of the world's top three trade currencies and is fast positioning itself as a treasury management currency. This has far-reaching implications for companies and financial institutions providing renminbi services, Ng explains.
While companies can gain efficiencies, reduce costs and enhance their access to the mainland market through the use of renminbi as a payment currency, the financial industry also needs to work collectively to help them understand how the currency is evolving. This is where the need for generalists and specialists comes into play, Ng explains.
"The financial industry needs to work collectively to help corporates understand how the currency is evolving, by being at the forefront of regulatory changes, sharing best practices and providing a holistic suite of RMB solutions encompassing payments, trade finance, foreign exchange, and debt and equity capital markets services across the RMB spectrum," he says.
The next step for those working in the renminbi business would be to further encourage its use in different parts of the world and enable the currency to be used in cross-border trade, investments and treasury management. Simplifying renminbi processing procedures and articulating the implications of regulatory and market developments will also be essential.
To maintain Hong Kong's position as a gateway between mainland China and the international market, professionals in the industry must work towards "the expansion in global demand for RMB services, which in turn would be conducive to a sustainable and robust model for Hong Kong as an offshore RMB centre," Ng says.
