Financial Secretary Paul Chan Mo-po told the Legislative Council's Financial Affairs Panel meeting that the government is considering expanding renminbi-denominated financial products and deposit services in the Hong Kong Special Administrative Region.

This is to encourage enterprises and investors from different countries to consider depositing their renminbi cash in Hong Kong

“In addition to providing more renminbi-denominated investment products, these funds also need to be held in custody. Previously, this was mainly done with European and American financial institutions, but now, considering geopolitical and sanctions risks, there is a need for enterprises and investors to reduce risk,” Chan said at the meeting on Monday.

Enterprises and investors are considering developing various derivative instruments and using these funds as collateral, in addition to deposits, Chan said.

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He also raised the idea of an offshore renminbi venture capital fund at the meeting, which he also mentioned in his Sunday blog.

“We are actively considering establishing an offshore renminbi venture capital fund through the Hong Kong Investment Corp to support Chinese mainland technology going global, and invest in mainland technology companies and Chinese entrepreneurs who can lead the development of cutting-edge technologies worldwide,” he said.

The finance chief added that HKIC-led investments can revitalize offshore renminbi funds. “Investors holding offshore renminbi may not want to invest all their funds in the onshore market, as the offshore market offers advantages such as liquidity and free convertibility.”

Since its inception, the HKIC has invested in over 200 projects, including hard technology, life sciences and health technology, new energy, green technology and related sectors. Ten of its portfolio companies have already gone public, and over 30 have submitted their listing applications or are preparing to submit their applications in Hong Kong this year. The company has said that for every HK$1 invested by the HKIC, it can attract HK$8 long-term market funds.

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The finance chief also said Hong Kong’s equity and property market has been stabilized. In the stock market, the average daily turnover of share-trading in the first four months of 2026 has reached HK$270 billion ($34.6 billion), higher than the HK$250 billion for the whole of last year, and funds raised through initial public offerings in the first four months also increased sixfold year-on-year to HK$151.4 billion.

“Following the Middle East conflict, more funds are flowing into Hong Kong. Middle East and European funds are expected to increase their investments in Hong Kong, and it is believed that cross-border wealth management and family office investment in Hong Kong will continue to increase,” Chan noted.

Regarding the property market, Chan said the office market has stabilized as there have been recorded cases of buying and selling, and leasing.  The retail shop leasing segment also has stabilized, as the level of rent reduction this year has narrowed significantly compared to last year, and rent levels have rebounded to levels seen at the end of 2025.

On the real economy front, the SAR government is closely monitoring the impact of rising energy prices and changes in interest rates on the SAR’s inflation trend, Chan said.

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The finance chief said that, while he is not worried about the stability of the energy supply, “energy price increase is inevitable because of the Middle East crises, and the government will continue to closely monitor the situation and adjust its response policies accordingly.”

He added that the current market interest rates in Hong Kong are at a suitable reference level which is expected to continue for some time.

Due to the influence of global oil prices, the government raised this year’s underlying inflation forecast upward to 2.5 percent.