Hong Kong to Grow Yuan Bond Market, Build Yuan Gold and Commodity Markets

Hong Kong intends to broaden its market for dim sum bonds — yuan-denominated debt issued in the city — and to build out gold and commodity markets priced in the Chinese currency, finance secretary Paul Chan said in a blog post.

The move is aimed at helping Beijing strengthen its influence over international pricing. Chan said Hong Kong has a distinctive part to play in advancing China's ambition of becoming a strong financial power.

The comments followed the unveiling of Hong Kong's first five-year plan. Presenting that plan, Chief Executive John Lee said the territory would introduce a central clearing and settlement system for gold in 2027.

Activity in the offshore yuan bond market has already picked up sharply. Dim sum bond sales hit a record of about 350 billion yuan, or roughly $52.3 billion, in the first half of this year — a rise of more than 60% over the same period a year earlier. International borrowers made up half of that total.

Offshore yuan loans in Hong Kong, meanwhile, climbed to a record 935 billion yuan last year, Chan said.

The plans point to Hong Kong's continued role as an offshore hub for the Chinese currency, with the expansion of yuan-linked debt, gold and commodities seen as a way to deepen the city's financial links with the mainland.