The People's Bank of China will focus on four key areas to promote the development of the offshore renminbi market.

First, ensuring ample and stable offshore renminbi liquidity. Currently, liquidity is supplied through four main channels. The first is central bank-level currency swaps, including the standing swap arrangement with the Hong Kong Monetary Authority, which was recently increased to 500 billion yuan. The second is market-based channels, including overseas entities issuing bonds domestically, bond repurchase agreements, domestic entities investing in overseas bonds and stocks, and foreign exchange swap transactions. The third involves the banking sector, where renminbi clearing banks provide liquidity, and overseas banks extend funds to offshore enterprises and banks via cross-border loans and interbank financing. The fourth channel is through enterprises and individuals, encompassing cross-border trade, direct investment, corporate overseas lending, and treasury pool arrangements. The central bank will continue to refine these mechanisms to provide stable, multi-tiered renminbi liquidity support across short, medium, and long-term horizons.

Second, expanding the pool of offshore renminbi assets. The central bank will maintain the regular issuance of its bills and support the Ministry of Finance in further increasing the issuance scale of offshore renminbi government bonds, diversifying maturities, and boosting the supply of high-quality assets. By improving and developing the market, it aims to attract sovereign institutions, financial entities, and multinational corporations to issue renminbi-denominated bonds, thereby enriching the diversity of available assets.

Third, invigorating trading in offshore renminbi financial products. Efforts will include developing offshore repurchase business, boosting secondary market trading for offshore renminbi government bonds and central bank bills, and encouraging market-making by financial institutions. Connectivity between onshore and offshore markets will be strengthened through cross-border repos, Bond Connect, and infrastructure linkages to align offshore renminbi financial asset pricing more closely with onshore benchmarks. Support will also be given for launching offshore renminbi government bond futures and developing the interest rate swap market to better meet the hedging needs of market participants against interest rate risks.

Fourth, enhancing services from offshore financial infrastructure. Guidance will be provided for the China Foreign Exchange Trade System to collaborate with the Hong Kong Monetary Authority and the Securities and Futures Commission to build a comprehensive financial trading platform. This platform will offer infrastructure services for trading in bonds, currencies, foreign exchange, and other financial markets.

In June of this year, the central bank initiated a pilot program for offshore renminbi foreign exchange trading in the Shanghai Free Trade Zone. This allows six major banks to use the CFETS platform to conduct renminbi foreign exchange transactions directly with overseas entities. This measure is designed to foster greater connectivity and integrated development between onshore and offshore markets, advancing high-level financial opening. Since its implementation, the pilot has received a positive market response, with trading volume increasing significantly and good progress being made.