Hui Ching-yu: Hope to implement the inclusion of RMB trading counters in Southbound Trading as soon as possible.

The Securities and Futures Commission (SFC) of Hong Kong has revealed that it is preparing to include RMB trading counter stocks in Southbound Trading, with the goal of implementing this before July 1 next year. Secretary for Financial Services and the Treasury Hui Ching-yu said on a radio programme that the government has been in close communication with mainland regulators, and that including RMB counters in Southbound Trading requires system updates and technical arrangements. He hopes it can be launched as soon as possible, as it will benefit both markets and investors. Hong Kong's Five-Year Plan proposes promoting the use of RMB for government expenditure. Hui Ching-yu said that paying part of government expenses in RMB is intended to match RMB use cases, and with the expected increase in the scale of RMB received and used in the future, the inclusion of RMB counters in Southbound Trading will allow mainland investors to buy stocks and pay stamp duty in RMB. He mentioned that the government currently also uses RMB for some expenditure, such as paying mainland medical institutions under the Healthcare Voucher Scheme. In the future, it will study paying the Dongjiang water fee and the fees for civil servant training services provided by mainland institutions in RMB. He stressed that the government collects taxes in Hong Kong dollars, and government expenditure is still mainly paid in Hong Kong dollars, so the proportion paid in RMB will not be very high. Asked whether paying in RMB would cause exchange losses or affect the linked exchange rate system, Hui Ching-yu said the two are unrelated and stressed that this is not a qualitative change. Hong Kong is the country's largest offshore RMB centre outside the mainland, and the relevant mechanism has always existed. He also noted that the government has long issued bonds in multiple currencies, including RMB, and stressed that exchange rate management is part of routine fiscal management, so he is not worried about the relevant work. In addition, Hui Ching-yu said that the 7-day offshore RMB liquidity bidding mechanism and the issuance of short-term offshore RMB debt instruments are supporting measures to increase offshore RMB circulation and liquidity. He said that as the real economy shifts from West to East, top-level financial activities and allocation must also adapt accordingly to increase RMB circulation. When more institutions are willing to use RMB, investors will be able to obtain RMB for investment and financing in a more convenient and reasonable manner.