Hong Kong authorities are planning to create an Asian competitor to leading European securities depositories, the Financial Times reports.
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According to him, this is due to their desire to reduce dependence on Western financial infrastructure and expand the global use of the yuan.
Details
The Hong Kong Stock Exchange (HKEX) announced on March 4 that it is partnering with the Hong Kong Monetary Authority (HKMA) to create an international clearing house in Asia that could compete with Belgium's Euroclear and Luxembourg's Clearstream.
The new clearinghouse “will help develop Hong Kong's fixed income market, delivering the next chapter of the renminbi's internationalisation and strengthening Hong Kong's status as an international financial centre,” HKEX Chief Executive Bonnie Chan said.
The Hong Kong Monetary Authority has been exploring the possibility of creating a competitor to Euroclear and Clearstream since at least 2022, the publication said.
In February, the newspaper reported that China had cut its investment in U.S. government debt to $759 billion last year, the lowest level since 2009. Analysts say Beijing's decline in U.S. debt partly reflects China's desire to diversify its reserves.
China is seeking to reduce its reliance on Western financial systems amid rising geopolitical tensions, the FT notes. This comes as Europe debates the possible seizure of £200bn of Russian assets frozen since Russia's invasion of Ukraine.
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