Table of Contents
Foreword ix
Preface xiii
List of Acronyms and Key Terms xvii
CHAPTER 1 The New Global Role for the Renminbi 1
A Longstanding—but Failing—Path 4
Allowing Renminbi Markets to Flourish 9
Political Tailwinds for Internationalisation 13
Challenges and Consolidation Risks 19
The Renminbi in a Multipolar World 23
CHAPTER 2 Linking the Offshore and the Onshore Renminbi Markets 25
International Transactions in a Domestic Currency 25
The Starting Point for Renminbi Internationalisation 31
Investability: Opportunities and Challenges 40
Timing Convertibility 45
PBoC and Exchange Rate Policy 50
The Advantages of the Offshore Renminbi 53
CHAPTER 3 The Birth and Evolution of the Offshore Renminbi Market in Hong Kong 57
A Chronological Look at Key Policy Liberalisations 59
More on Renminbi Trade Settlement in the Post–Big Bang Era 79
From Renminbi Trade Settlement to Offshore Renminbi Deposits 93
CHAPTER 4 New Markets—New Jargon, New Opportunities 101
The Chinese Yuan in FX Spot 101
A New Diversity of Forward Markets 109
Opportunities in the CNH Markets 112
Tracking Returns in CNH Deposits 121
The Dim Sum Bond Market Matures 126
CHAPTER 5 Geographical Expansion of the Offshore Renminbi Universe 131
From Hong Kong to Haiwai through Trade 133
Renminbi in London and the Hub-and-Spokes Model 139
Direct Renminbi Cooperation with Mainland China 142
Shanghai’s Aspiration and Infrastructure Overhaul 147
Hong Kong Is Still in Pole Position 151
CHAPTER 6 Drivers for Internationalisation 163
Public Policy: “Replacing” USD 168
Economics: China’s Role in the Global Economy 174
For Investors: Appreciation—but, More Importantly, Diversification 178
For Corporations: Fairer and More Transparent Pricing 182
For Official Reserve Managers: A New Route to Stability? 187
CHAPTER 7 The Rise of the Renminbi and Its Policy Implications 193
The Renminbi’s Rise: A Threat to the Hong Kong Dollar? 193
The Renminbi’s Rise: A Regional FX Anchor 198
The Renminbi’s Rise: The SDR and the IMF 206
The Renminbi’s Rise: The US Dollar in a Multipolar World 213
Afterword: The Life Overseas with the Rising Renminbi 217
Appendix: The CNH Timeline 223
Bibliography 229
About the Authors 231
Index 233