First Meeting of the Malaysia - Hong Kong Private Sector Dialogue on Offshore Renminbi Business

The Malaysia - Hong Kong Private Sector Dialogue on Offshore Renminbi Business ("Dialogue") convened for its first meeting today (5 December) in Kuala Lumpur. This Dialogue was established following the agreement by Bank Negara Malaysia (BNM) and the Hong Kong Monetary Authority (HKMA) in August 2013 to strengthen the collaboration between Malaysia and Hong Kong in the area of renminbi (RMB) business. It was attended by senior representatives from ten Malaysian and Hong Kong banks. BNM and HKMA officials facilitated the discussions during the meeting.

The interest and participation in the Dialogue reflected the strengthening trade and investment links between Malaysia, Hong Kong and Mainland China. Malaysia is China's largest trading partner within the Association of Southeast Asian Nations (ASEAN) region, while outward direct investments from China to Malaysia has also increased rapidly in recent years. To facilitate the associated increase in the demand for RMB trade settlement and investment opportunities, the Dialogue is intended to be a platform through which Malaysian and Hong Kong financial institutions can deepen their cooperation and enhance their collective capabilities in providing RMB products and services.

Dialogue participants reviewed recent developments in the offshore RMB markets in Malaysia and Hong Kong, and agreed to enhance collaboration to further develop the market in the following areas:

• To strengthen efforts in raising awareness amongst corporations about the use of RMB in trade settlements and investments.
• To expand business relationships between banks in Malaysia and Hong Kong, with the view to further optimising liquidity conditions in the two financial markets.
• To assess market infrastructure needs and consider appropriate market responses in developing offshore RMB products and services to meet emerging market demand.
• To promote the development of the offshore RMB sukuk market, leveraging on the respective strengths of Malaysia and Hong Kong in Islamic finance and in RMB business respectively.

The next meeting of the Dialogue will be held in Hong Kong in 2014.

Note:
The ten Malaysian and Hong Kong banks participated in the Dialogue were Bank of China, Bank Islam, CIMB Bank, Hong Leong Bank, HSBC, Industrial and Commercial Bank of China, Maybank, Public Bank, RHB Bank and Standard Chartered Bank.

Source: Bank Negara Malaysia