Author(s): Robert Minikin
The rise of the renminbi and what it means for forex markets Chinese authorities have ambitious plans to "internationalize" the renminbi, transforming it from a tightly controlled domestic legal tender into a global currency for international trade, held by both private and public sector asset managers. The Offshore Renminbi examines this impending currency revolution, outlining why the emergence of China as a major economic power will likely soon be matched by a transformation of the renminbi's role in the global financial system. It explains how new markets for "offshore" renminbi are developing outside mainland China since the country is not yet ready to fully open up its economy to international capital flows, and the regulations that govern them. The potential growth for the renminbi market is vast, thanks to China's role in the global trading community. The early stages of the internationalization effort were small-scale, but momentum has greatly increased over the past 18 months, making this book more relevant than ever.
These developments offer new opportunities (and challenges) for corporate treasurers and investors, as China's profound economic success and growing prominence in global trade may transform offshore renminbi into a new global reserve currency and a legitimate competitor to the U.S. dollar. Explores how the "internationalization" of the renminbi is likely to yield a new global currency to rival the U.S. dollar Examines "offshore" renminbi and the host of new financial markets they have created, from a spot FX market to Dim Sum bonds in Hong Kong Covers broad themes of interest to general readers and policymakers, as well as more detailed issues of practical and direct importance to corporate treasurers and investors The Chinese government has ambitious plans to make the renminbi a global currency. The Offshore Renminbi explains the complexities of this strategy and the dramatic implications for the global FX markets.
Foreword Preface Glossary of Acronyms and Technical Terms Chapter 1: The New Global Role for the Renminbi A Long-Standing - but Failing - Path Allowing Renminbi Markets to Flourish Political Tailwinds for Internationalisation Challenges and Consolidation Risks The Renminbi in a Multipolar World Chapter 2: Linking the "Offshore" and the "Onshore" Renminbi Markets International Transactions in a Domestic Currency The Starting Point for Renminbi Internationalisation "Investability"; Opportunities and Challenges Timing Convertibility PBoC and Exchange Rate Policy The Advantages of the Offshore Renminbi Chapter 3: The Birth and Evolution of the Offshore Renminbi Market in Hong Kong A Chronological Look at Key Policy Liberalizations More on Renminbi Trade Settlement in the Post-Big Bang Era From Renminbi Trade Settlement to Offshore Renminbi Deposits Chapter 4: New Markets -- New Jargon, New Opportunities The Chinese Yuan in FX Spot A New Diversity of Forward Markets Opportunities in the CNH Markets Tracking Returns in CNH Deposits The Dim Sum Bond Market Matures Chapter 5: Geographical Expansion of the Offshore Renminbi Universe From 'Hong Kong' to Haiwai through Trade Renminbi in London and the 'Hub-And-Spoke' Model Direct Renminbi Cooperation with Mainland China Shanghai's Aspiration and Infrastructure Overhaul Hong Kong Is Still in Pole Position Chapter 6: Drivers for internationalization Public Policy; "Replacing" USD Economics; China's Role in the Global Economy For Investors; Appreciation - But, More Importantly, Diversification For Corporate; Fairer and More Transparent Pricing For Official Reserve Managers; a New Route to Stability? Chapter 7: The Rise of the Renminbi and its Policy Implications The Renminbi's Rise: a Threat to the Hong Kong Dollar? The Renminbi's Rise: a Regional FX Anchor The Renminbi Rise: the SDR and the IMF The Reminbi's Rise : the US Dollar in a Multipolar World Appendix: The CNH Timeline Bibliography About the Authors Index