According to reports from British and Hong Kong media, the Chinese government confirmed last week that London is one of the offshore Renminbi trading centers. However, a strong competitor for the offshore Renminbi center is also Singapore. Analysts from foreign banks here believe that Hong Kong's leading position as the offshore Renminbi center is unshakeable, and other cities are only competing for the second place.
Woon Khien Chia, head of Emerging Markets Strategy at the Royal Bank of Scotland (RBS), believes that Singapore has a clear advantage in becoming the second largest offshore Renminbi center compared to other international financial centers.
He analyzed that as the only international financial center in ASEAN, Singapore's Renminbi business services will cover the entire ASEAN region with a population of over 500 million. Importantly, Southeast Asian enterprises and residents have a recognized and trusting attitude towards the Renminbi. As the second largest foreign exchange trading center in Asia after Tokyo, Singapore has mature foreign exchange trading experience and talent, which will facilitate the promotion of Renminbi offshore market trading. Additionally, Singapore's status as a global private banking and asset management center, as well as a commodities trading center, may also help expand the Renminbi's reach globally.
In fact, as early as July 2009, when the pilot program for Renminbi cross-border trade settlement officially started, Singapore actively participated in the development of the offshore Renminbi market. Within the first month after the pilot began, Singapore became one of the first countries to complete Renminbi cross-border trade settlements.
"Before China officially confirmed Singapore's status as an offshore Renminbi market, Singapore's offshore Renminbi market was merely an appendage to Hong Kong's offshore Renminbi market. If China confirms Singapore's offshore Renminbi market status, its relationship with Hong Kong will be complementary rather than competitive," said Xie Dongming.
(Reprinted from China News Service)
