Experts suggest piloting qhii in Hong Kong to promote RMB internationalization

Xinhua Beijing, November 13 (reporter Huayadi, Liu Shiping) Deutsche Bank Greater China chief economist Ma 13th proposed that the Hong Kong-registered institutional investors to implement the "Hong Kong version of the renminbi Qhii scheme (qhii)" To nurture a good liquidity of the Hong Kong renminbi capital Market,　　So as to promote the process of RMB internationalization.　　Ma was presented at the Symposium on "World Economy and China: post-crisis global economic and financial structure", sponsored by the China Institute of International Finance, the Chinese Academy of Social Sciences and other units. Ma explained that the so-called "qhii (Qualifiedhongkong institutional Investors, qualified Hong Kong institutional Investor) scheme" is to allow institutional investors registered in Hong Kong (including insurance companies, fund companies, brokerages, banks, etc.)　　In the purchase of the new issue of renminbi financial products, to obtain the amount of renminbi, the allocation of quotas can be considered in excess proportion.　　Specifically, consideration may be given to allowing institutional investors registered in Hong Kong to exchange the required amount of renminbi (given the corresponding renminbi amount) in Hong Kong and US dollars, when they purchase renminbi products at the HK and two level markets. This will help to "nurture a well liquid Hong Kong renminbi capital market".　　Ma said that the current source of renminbi liquidity in Hong Kong is too narrow. "The system is only allowed to accumulate renminbi deposits in Hong Kong through four channels such as ' Hong Kong residents can redeem a certain amount of renminbi per day ' and ' individuals from the mainland to enter Hong Kong with renminbi cash '" to provide liquidity to renminbi financial markets. It is estimated that 5 years later, only 300 billion yuan will support the renminbi market, with a sufficiently liquid bond market size gap may be six or seven times times.　　Ma said that only 2 trillion yuan in the size of the bond market is sufficient liquidity and efficiency. The specific operation aspect, MA thinks, may consider uses one to apply the proportion as the basis the quota distribution method. For example, the Ministry of Finance in Hong Kong issued 10 billion yuan bonds, 100 institutions to purchase 100 billion yuan. With an oversubscribed subscription of 10 times times, each agency will receive 10% of its purchase amount, with the same amount of renminbi allotted.　　At the same time, when bonds are issued, institutions that hold bonds sell bonds in the level two market, requiring them to exchange the renminbi they receive for the sale of their bonds back to the HKD and the dollar. "Under this mechanism, the renminbi quota only expands through the issuance of securities, and the growth rate of Hong Kong's RMB capital market can be mastered."　　"This would ensure that the increase in the renminbi's liquidity is mainly used in Hong Kong-registered financial institutions and will help attract more global institutional investors to Hong Kong," Ma said. Ma further said that the trial of such a mechanism on the financial stability of mainland China and the risk of controllable, in Hong Kong to test the internationalization of the renminbi is relatively small overall risk, even if some problems have limited impact.