Global investors pivot from access to scale in yuan operations, anchored by Hong Kong

Global institutional investors are pivoting away from basic market entry to scaling up their yuan operations, with offshore hubs such as Hong Kong emerging as the central infrastructure for that shift, a new survey showed.

The survey, conducted by HSBC and polling more than 120 institutional investors collectively managing over US$32 trillion in assets across 12 Asia-Pacific markets, found that 63 per cent preferred offshore yuan markets for currency transactions, while 54 per cent relied on cross-border channels such as Bond Connect and Stock Connect.

Yuan adoption has become portfolio-led, with 66 per cent of respondents citing diversification as their primary driver for allocation, compared with 54 per cent citing China’s global trade footprint and 40 per cent chasing specific yield opportunities.

Meanwhile, three quarters of respondents expected to increase yuan allocations over the next one to two years, alongside rising demand for hedging and risk management tools.

“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,” said Cheuk Wong, head of markets and securities services for Hong Kong at HSBC, referring to the official name of China’s currency.

The shift comes against the backdrop of Beijing’s long-running push to internationalise the renminbi, including expanded cross-border financial “Connect” schemes and growing offshore liquidity pools that allow global investors to access Chinese assets without full onshore participation.