China strategy
As the Chinese Renminbi (RMB1) internationalises, it is moving from being purely a trade currency towards an investment and reserve currency. The potential benefits a strengthened offshore Renminbi could bring, not only to China and Chinese investors but to the global market as a whole, are significant.
Clearstream’s vision is to leverage its capacity and infrastructure, drawing on its global linkages, partners and client base, to bring together both supply and demand on a global level. In doing so, we can facilitate greater liquidity in the amount of available Renminbi, both onshore and offshore.
Clearstream has been actively promoting the internationalisation of the Renminbi since 2010, and since then we have been integral in many significant steps as this currency evolves.
Our vision
By leveraging our international infrastructure, we have the ability to act as a reciprocal gateway between Chinese and non-Chinese investors and issuers. At the same time we will continue to develop our network of global partners in order to maximise liquidity in this growing currency.
Our well-established partnerships with the global banks, domestic infrastructures and local agents will boost offshore Renminbi cash management capabilities by ensuring there are sufficient cash reserves available to participants both during the Asian business day and extending into European trading hours.
Clearstream’s offering leverages ongoing reform efforts in China to unparalleled access to Chinese capital markets across a range of asset classes.
- We are currently the only ICSD to offer settlement and custody services of China A-shares, with settlement and custody services offered for both the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect schemes.
- Our China Bond Link provides eligible international investors with individual quota-free access to the onshore Chinese interbank bond market, leveraging simplifications recently brought in by Chinese regulators.
- Further building on developments to open up the market, Clearstream’s link to Bond Connect will provide access to the onshore Chinese interbank bond market. This offers qualified foreign institutional investors investment opportunities into the Chinese fixed income market via Hong Kong.
In parallel to these services, our award-winning collateral management platform, the Global Liquidity Hub, will greatly enhance efficiency of the offshore RMB cash market.
Finally, we are determined to improve RMB availability beyond the geographical boundaries and time-zones of Asia, to European and American markets, further promoting liquidity of both the currency and products on a global level. The first steps in this process are already visible through the establishment of China Europe International Exchange (CEINEX), a joint venture our parent company Deutsche Börse has founded together with the Shanghai Stock Exchange (SSE) and China Financial Futures Exchange (CFFEX).
1Clearstream uses the official ISO currency code of CNY for technical documentation