It's a healthy competition after all.
According to Barclays, Hong Kong, the largest offshore RMB centre, has been subject to a lot of competition in Asia, particularly from Singapore and Taiwan, as well as from globally for a long time.
The development of the Shanghai Free Trade Zone would be another potential threat. Nonetheless, Barclays believes that the whole offshore RMB pool and trade will continue to grow over time.
As the pie gets bigger, all RMB centres, including Hong Kong, should benefit.
Currently, RMB deposits in Hong Kong account for less than 0.7% of China’s deposits; RMB trade settlements in Hong Kong accounts for about 14% of China’s trade and is still growing.
In addition, we also believe that Hong Kong banks, which operate in free markets, have survived and thrived and will surely adapt to the emergence of another financial centre.
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