The Offshore Renminbi: The Rise of the Chinese Currency and Its Global Future

The implications of China’s momentous decision to internationalise its national currency extend far beyond its many clear advantages for national and regional trade and economic stability. While the Chinese government’s game plan regarding the opening of the renminbi to the global markets remains obscure, no one can doubt that its goals are ambitious including, perhaps, replacing the U.S. dollar as the global reserve currency.

As a global currency, the offshore renminbi is still a comparatively minor player, limited mainly to the Hong Kong Dim Sum bond and FX spot markets. Yet it already has begun to have a significant impact on the global business and finance status quo, challenging time-honored market practices such as invoicing in U.S. dollars and creating a steadily mounting wave of new financial products and investment opportunities.

Written by two Hong Kong based analysts with unparalleled expertise in Chinese market development and insider knowledge of the Chinese authorities’ motives and mission regarding the renminbi, The Offshore Renminbi provides detailed answers to questions about the rise of the renminbi that are of critical importance to international business, finance and public policy professionals. Supported by first-hand source material and extensive original research, Robert Minikin and Kelvin Lau reveal:

• The motives behind China’s decision to open its national currency to global free market forces and what it really hopes to gain by the move
• The role the global credit crisis of 2008 played in the timing and structure of the rollout of the offshore renminbi
• Why China has not fully opened its economy to international capital flows
• How long it is likely to be before China fully opens the renminbi to a global free market
• Regulatory measures which have laid the foundation for the new offshore renminbi
• The huge potential for renminbi market growth given China’s increasingly central role in global trade
• The new financial markets and instruments that have sprung up around the offshore renminbi and their importance for investors and traders
• Public policy implications of an internationalised renminbi and the seismic shifts already underway in both the Asian and global economies

The first authoritative, in-depth analysis of the rise of the renminbi and what it means for the international markets, The Offshore Renminbi is a valuable resource for corporate treasurers, real money and hedge fund investors, FX traders and financial officers at multinational corporations, as well as government policymakers and academic researchers in a variety of related fields.

Reveals the truth about China’s big plans for its national currency and the global implications of an “internationalised” renminbi

“Robert and Kelvin have done an excellent job detailing the infrastructure of renminbi markets, in China and offshore, and describing specific policy moves to encourage internationalisation of the currency. Its accession to reserve currency status will depend on removal of Chinese exchange controls, acceptance of a floating yuan, and probably the end of interest-rate fixing within China, moves that could take much longer than the authors suggest. But as China moves down this path, this book will be a good guide to understanding its implications.”
Charles Dumas, Chairman and Chief Economist of Lombard Street Research

“Minikin and Lau have written a timely, comprehensive, and useful book on what may be the most important opening of Chinese financial markets for years. China needs to embrace deeper reforms to continue to grow, and the relaxation of capital controls and a growing international role for the renminbi will be essential steps in that process. Understanding what is happening in Hong Kong and beyond with the renminbi is vital for anyone interested in Chinese growth.”
Fraser Howie, Managing Director, CLSA Singapore and co-author of Red Capitalism

“The authors have provided a comprehensive and illuminating description of the internationalisation of the renminbi, one of the most significant financial stories of our time.”
Robert Cookson, Asia Markets Correspondent at the Financial Times