Global institutional investors are moving beyond initial market entry to scaling up their yuan operations, with offshore centers like Hong Kong becoming central to this transition, according to a recent survey conducted by HSBC.

The survey polled over 120 institutional investors managing more than US$32 trillion in assets across 12 Asia-Pacific markets. It found that 63% of respondents preferred offshore yuan markets for currency transactions, while 54% utilized cross-border channels such as Bond Connect and Stock Connect.

Yuan adoption is increasingly portfolio-driven: 66% of investors cited diversification as their primary reason for yuan allocation, compared to 54% who pointed to China's global trade presence and 40% seeking specific yield opportunities. Additionally, 75% of respondents expect to increase their yuan allocations within the next one to two years, alongside growing demand for hedging and risk management tools.

Cheuk Wong, head of markets and securities services for Hong Kong at HSBC, noted, “What has shifted in recent years is that renminbi market access is no longer about entry; it is about whether investors can operate seamlessly at scale.” This reflects Beijing’s ongoing efforts to internationalize the renminbi through expanded cross-border financial "Connect" schemes and growing offshore liquidity pools, enabling global investors to access Chinese assets without full onshore participation.

Sources