HONG KONG, April 29 (Xinhua) -- Hui Xian Real Estate Investment Trust (REIT) started trading on Friday. As the first Renminbi- denominated REIT sold in Hong Kong as well as the first Renminbi- denominated initial public offering outside of the Chinese mainland, the listing marks a historic milestone in the development of Hong Kong's off-shore Renminbi market.
From the initial restriction of circulation outside of the Chinese mainland to the inflow into the surrounding economies, Renminbi has now developed into settlement currency or even investment currency during the past two decades. As a global financial center, Hong Kong serves as the unique role in the course of Renminbi internationalization.
The following is the major events of the development of Hong Kong's off-shore Renminbi market.
March 1993 -- The individual visitors were allowed for the first time to bring less than 6,000 yuan across the boarder, and Renminbi started circulating in Hong Kong since then.
November 2003 -- The People's Bank of China (PBOC), the country 's central bank, agreed to provide clearing arrangements for banks in Hong Kong to conduct personal Renminbi business on a trial basis, including Deposit-taking, Exchange, Remittances and Renminbi Cards. One month later, Bank of China (Hong Kong) was appointed as the Clearing Bank for Renminbi business in Hong Kong.
February 2004 -- The Renminbi business was officially launched in Hong Kong to facilitate crossborder tourist spending and to further strengthen economic integration between Hong Kong and the Chinese mainland.
December 2005 -- The Renminbi business in Hong Kong has been expanded in four broad areas: opening of Renminbi accounts by designated merchants; use of Renminbi cheques in Guangdong province by Hong Kong residents; exchange and remittance of Renminbi by Hong Kong personal depositors and credit limits for Renminbi cards issued by participating banks.
June 2007 -- The PBOC and National Development and Reform Commission announced that financial entities incorporated in China 's mainland were allowed to issue Renminbi bonds in Hong Kong, subject to approval. This was the first step towards creating more uses for Renminbi funds in Hong Kong.
June 2009 -- The PBOC launched the pilot scheme for Renminbi settlement of cross-boarder trade between Shanghai and four cities in Guangdong province on the one hand, and Hong Kong and Macao on the other. This scheme allowed Renminbi conversion within selected cities between the onshore and offshore markets for trade-related transactions.
September 2009 -- The Chinese Ministry of Finance issued 6 billion yuan treasury bonds in Hong Kong. It was the first time that China's national debt sold outside of the Chinese mainland.
February 2010 -- The Hong Kong Monetary Authority issued a clarification that participating banks could develop Renminbi business based on regulatory requirements and market conditions in Hong Kong, as long as these businesses do not entail the flow of Renminbi bonds back to the Chinese mainland.
June 2010 -- The Renminbi trade settlement scheme was expanded to cover 20 provinces and cities in the Chinese mainland from the initial five, and their trade transactions with any part of the world can be settled in Renminbi. Any enterprises in the relevant provinces and cities can settle their merchandise imports, service trades and other current account transactions in Renminbi, while an expanded list of eligible enterprises will be able to settle their merchandise exports in Renminbi.
July 2010 -- The PBOC and Bank of China (Hong Kong) signed a revised Settlement Agreement on the Clearing of Renminbi Businesses. Following the revision of the Settlement Agreement, there will no longer be restrictions on banks in Hong Kong in establishing Renminbi accounts for and providing related services to financial institutions; and individuals and corporations will be able to conduct Renminbi payments and transfers through the banks.
August 2010 -- The PBOC announced that foreign central banks, Renminbi clearing banks, and cross-boarder Renminbi trade settlement participating banks could start participating in the interbank bond market in the Chinese mainland, subject to approval by the PBOC.
January 2011 -- The PBOC announced a pilot scheme for the settlement of overseas direct investments in Renminbi. Under the Pilot Scheme, the Chinese mainland enterprises, upon approval by the relevant authorities, can conduct direct investments overseas using Renminbi. Moreover, the Hong Kong branches and correspondent banks of the Chinese mainland banks can obtain Renminbi funds from the Chinese mainland and extend Renminbi lending to the enterprises conducting the investments. (One U.S. dollar is equivalent to 6.5 yuan)
