Q: It is often said Hong Kong is the testing ground for China's capital account liberalisation, as seen in the pilot for the renminbi business here. Could you give us a little bit of background on the evolution of renminbi financial services in Hong Kong?
A: Hong Kong is the testing ground for renminbi convertibility. As early as 2004, the Chinese State Council approved the introduction of a narrow banking business in renminbi in Hong Kong, which became the first and by far the largest market where banks can conduct currency exchange, deposit-taking, credit card issuance and remittances services in renminbi for their customers. The scope of renminbi business was expanded in June 2007 with the issuance of renminbi bonds by mainland Chinese financial institutions.
