Hong Kong Exchanges and Clearing Limited Chief Executive Officer Charles Li speaks during a forum of Shanghai-Hong Kong financial cooperation under the Belt And Road Initiative held in Hong Kong Oct 16, 2017. (ROY LIU / CHINA DAILY)

HONG KONG - Hong Kong Exchanges and Clearing Limited (HKEX) Chief Executive Charles Li Xiaojia said on Tuesday that Hong Kong has to be prepared to support the internationalization of renminbi.

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Hong Kong should take advantage of being an offshore renminbi center and proactively promote the internationalization of the Chinese currency, Li said at the RMB Fixed Income and Currency (FIC) Conference 2020 held on Tuesday.

Charles Li believed that renminbi should play a more important role in the global fixed rate of interest and currency market, allowing further internationalization of renminbi at the right time to move it towards the center of the global market

Li said, at present, the US dollar is the most important currency in the world, which can hardly be replaced by other currencies. In the face of COVID-19, the US Federal Reserve has adopted an unprecedented policy on monetary easing, which might bring about an economic crisis due to the very high liquidity of US dollars in the market.

However, people are not panic because there are no other options, Li said, adding that whether the global market will need to rely entirely on the US dollar system depends on whether there will be a strategic plan.

He believed that renminbi should play a more important role in the global fixed rate of interest and currency market, allowing further internationalization of renminbi at the right time to move it towards the center of the global market.

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Li said that HKEX has launched renminbi currency futures, bonds and other products, and made attempts in green bonds and financing. Hong Kong should not only rely on these products but also set up other plans such as an over-the-counter trading platform to expand new areas of renminbi investment.

By the end of 2019, the size of Hong Kong's offshore reminbi liquidity pool was around 658 billion yuan (about US$97.11 billion); the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect had accumulated turnover of 27 trillion yuan since their inception.

The cumulative turnover of the Bond Connect has exceeded 6 trillion yuan in the past three years since it was launched, becoming an important channel for international investors to enter the Chinese bond market. (1 US dollar = 6.77 yuan)