Mainland Chinese banks need to make a bigger push to ensure Singapore’s renminbi markets develop rapidly, ICBC chairman Jiang Jianquing has told a recent conference focusing on market developments in the city-state.

Mainland Chinese banks need to make a bigger push to ensure Singapore’s renminbi markets develop rapidly, ICBC chairman Jiang Jianquing has told a recent conference focusing on market developments in the city-state.

He discussed the principle of “serving the real economy” moving beyond arbitrage, and accelerating RMB product innovation. He also highlighted the need to improve communication among offshore RMB centres and develop offshore RMB infrastructure.

The comments come at a time when the RMB is still operated under a controlled forex regime, fluctuating in a band against the dollar. As China’s economy has grown to be the world’s second largest, behind only the US, there has been inevitable speculation of how, or whether the Chinese currency will rival that of the dollar as a global reserve currency. In recent years and months, jurisdictions such as the UK have signed deals with China in capturing a chunk of RMB-based trade, demonstrating fierce competition for this market.

“With China’s capital account yet to be fully liberated, the offshore RMB market growth is particularly vital to push for RMB internationalisation. Policies need to reflect the principle of “serving the real economy”, and products and services customised to client needs, in order to provide more convenience in trade and investment,” he said.

He added with regards to Singapore, “ICBC has established a unified clearing platform that provides internal integrated clearing services and is working closely with the industry as well as the Monetary Authority of Singapore in the development of the RMB Real-Time Gross Settlement in Singapore. ICBC Singapore is also working closely with their head office and New York branch to provide round-the-clock RMB clearing services,” he said.  

Jianqing spoke at the first RMB Internationalisation Summit held by ICBC in Singapore yesterday. The event was co-hosted by Business China, IE Singapore, EDB and SGX, and was held at St Regis Hotel with more than 500 industry delegates.

As at June 2014, total RMB deposits in Singapore had grown 84 per cent to RMB254 billion ($41 billion), compared to a year before. Monthly RMB clearing volume has surged to the current RMB3.5 trillion from an initial volume of approximately RMB100 billion.