In April, UK chancellor George Osborne announced ambitious plans for London to become the next big offshore hub for trading in the Chinese currency. Months later, the authorities in Beijing granted both Singapore and Taipei renminbi clearing status, which will allow these cities to bypass Hong Kong to clear some trades directly with the People’s Bank of China.
As these developments unfolded, Hong Kong media were quick to question their city’s status as the world’s leading offshore renminbi hub. Some headlines suggested that the former British colony could rapidly lose its dominant market share as more offshore hubs open.
Yet recent trade figures suggest otherwise. Swift, the financial information provider, says, as of September, 80 per cent of all global renminbi payments are still made in Hong Kong, a figure unchanged from last year. In 2011, bilateral trade between Hong Kong and China totalled $284bn, compared with respectively $160bn and $64bn for Taiwan and Singapore, according to financial services group DBS.