China

Plans for offshore Yuan in Macau

A proposal has been submitted to Beijing for the set up of an offshore Yuan currency, denominated “Nasdaq”, with the plan hoping to be approved by mid-December in time for the 20th anniversary of the city’s return to Chinese administration.

The proposal, having been discussed by the Director of Guangdong’s Local Finance and Supervision and Administration Bureau, said that he hoped China’s central government might soon be approved, benefitting Guangdong’s aspirations to cap more capital in the Macau sector, according to a report by South China Morning Post.

The Monetary Authority of Macau has begun to undertake a study into the establishment of a securities exchange, reiterating that it would “serve the country’s needs” and would “differentiate (itself) from incumbent financial centres nearby.”

The feasibility study, which is investigating the possibility of establishing a securities market dominated and settled in Yuan, was assigned to the Monetary Authority of Macau by Beijing; it has been undertaken as part of the Beijing government’s Greater Bay Area development plan, which hopes to foster the development of an economic hub which includes Hong Kong, Macau and 9 other cities in the Guangzhou area.

Macau’s financial sector, whilst developing, is still much smaller than that of its neighbouring Hong Kong, due to its geographic location facilitating the development of its reputation as an offshore trade hub for China.

The Guangdong official who revealed the plan, who has not be named, has been quoted as saying that “We (Guangdong) helped the Macau government to make a plan for (setting up) the stock exchange, with the aspiration to make it an offshore renminbi Nasdaq (Yuan).”

There has been no information released regarding Beijing’s response, as of yet.