Hong Kong is set to expand its market for offshore yuan bonds, known as dim sum bonds, and reinforce its position as China's leading offshore renminbi hub. Chief Executive John Lee announced that the Hong Kong Exchanges and Clearing Limited (HKEX) will launch an Offshore RMB Bond Index. This index is intended to serve as a reference for market trends and an underlying index for exchange-traded funds (ETFs), with expectations that it could be launched before the end of the year.
The city's strategy also includes deepening its role in promoting yuan use across financing, investment, and trade. Hong Kong will establish mechanisms to strengthen currency liquidity, develop a comprehensive cross-boundary yuan circulation network, and facilitate its exchange with other regional currencies. The government itself will lead by exploring and driving more settlement of government expenditures in yuan under suitable scenarios, according to Lee’s policy speech.
In 2025, offshore RMB lending in Hong Kong reached a record high of RMB 935 billion, and bond issuance hit RMB 1 trillion for two consecutive years. To further enhance liquidity, the RMB Business Facility, which provides banks with a stable and lower-cost source of RMB funds, has been expanded to RMB 500 billion, with loan tenors extended up to three years. Additionally, the Hong Kong Monetary Authority (HKMA) is exploring enhancements to its Currency Swap Agreement with the People's Bank of China and will introduce a tendering mechanism for seven-day offshore RMB liquidity to support banks' short-term financing needs. The HKMA will also explore issuing offshore RMB short-term debt instruments to provide more investment and liquidity management products and support the building of an offshore RMB yield curve.
