The week in renminbi: Trump lays it on China, blueprint out for London Connect, Safe hands Bridgewater Associates an RQFII quota

In this round-up, Donald Trump says more tariffs on Chinese imports are likely, the Chinese authorities release the first London Connect details under public consultation, and State Administration of Foreign Exchange (Safe) adds Ray Dalio's hedge fund to the list of RMB qualified foreign institutional investors.

  • By Paolo Danese
  • 03 Sep 2018
Email a colleague
Request a PDF

US president Trump said it was "not totally wrong" to expect tariffs on a further $200bn of imports from China as soon as this week, according to the transcripts of an interview with Bloomberg.

"China has taken advantage of the United States and its leaders," he continued. "People don’t like saying that because you have some Republicans that don’t like it and you have some Democrats. I’m not just blaming President Obama. I’m blaming many administrations. China was rebuilt with American dollars. They were taking out $500bn a year. And, in earlier stages lesser amounts, but massive nevertheless. And I said it’s time to stop. We can’t let this happen."


The China Securities Regulatory Commission (CSRC) issued a public draft for the Shanghai-London Stock Connect blueprint on August 31. The draft confirms the scheme will be based on cross-listed depository receipts (DRs) and lays out measures for cross-border conversion mechanisms for the DRs, such as their creation and redemption by investors in the two markets. Requirements for Chinese companies to list these DRs are generally in line with existing red-chip regulations, the CSRC said. Further rules govern DRs issuance conditions, issuing price, the lock-up period for redemption, and broader requirements on foreign securities companies and depository banks.


Safe handed out Rmb5.4bn in new RQFII quotas in August, bringing the scheme's total size to Rmb627.5bn ($92.3bn). Two new institutions received quotas: the US hedge fund Bridgewater Associates, which received its licence from the CSRC in May and was now awarded a Rmb2.6bn quota, and Baring Asset Management, whose licence was confirmed a year ago but only just received a first Rmb800m quota, according to GlobalRMB data. UBS Asset Management (Hong Kong) expanded its quota to Rmb5bn.

The QFII and the qualified domestic institutional investor (QDII) schemes saw no new quotas awarded in August.


Hong Kong's renminbi deposit pool recovered slightly in July 2018, jumping 3.9% to Rmb607.6bn and hitting its highest level since November 2016, according to CEIC data. Other jurisdictions are not faring as well, with Singapore seeing a 2.1% drop in the second quarter to Rmb136bn, South Korea's stuck at around $1.2bn-equivalent since the start of 2018, and Taiwan's pool standing at Rmb312.9bn in July, the lowest level since March this year, according to CEIC data.

Hong Kong also had an uptick in RMB cross-border trade, with Rmb361.6bn recorded in July, a 4.6% monthly jump and the highest volume since January.


China Foreign Exchange Trade System (Cfets) said it would extend the trading hours for the RMB-Kazakhstan Tenge pair in the domestic foreign exchange market starting September 3, according to an August 31 statement. The change is to support the Belt and Road Initiative and facilitate the participation of offshore institutions in the local FX market, Cfets said. Trading hours will be extended from 10am-4.30pm to 10am-7pm.


The second phase of the A-shares' inclusion in the MSCI emerging markets indexes went live at the start of September. On August 31, Stock Connect northbound trading recorded total turnover of Rmb31.7bn across the Shanghai and Shenzhen channels, with just 6% and 3% of the daily net trading quotas used up, respectively, according to data by the Hong Kong Exchanges and Clearing. Aggregate figures for August show total northbound turnover for Stock Connect of Rmb259.4bn, up 13.8% from a month earlier.

Our most recent stories:

China at crossroads over securitization law

ABCI’s Panda squeezed by policy announcements

Comment: New Panda bond framework: a missed opportunity

  • By Paolo Danese
  • 03 Sep 2018

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 21.85
2 China Merchants Securities Co 14.67
3 Industrial and Commercial Bank of China (ICBC) 14.44
4 Agricultural Bank of China (ABC) 8.89
5 China Securities 7.41

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 10-Jul-19 BMW Finance N.V. Germany 3,500
2 20-Jun-19 Maybank Malaysia 2,000
3 30-May-19 Portugal Portugal 2,000
4 17-May-19 Trafigura The Netherlands 540
5 16-May-19 CITIC Pacific China 1,000

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 32.50
2 Credit Agricole 6.34
2 HSBC 6.34
4 Bank of China (Hong Kong) (BOCHK) 6.22
4 Bank of Communications Hong Kong Branch (BOCOM HK) 6.22

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 16-Jul-19 CIFI Holdings China 1,600
2 22-May-19 Agricultural Development Bank of China (ADBC) China 3,000
3 16-Apr-19 ICBC Singapore Branch China 1,000
4 10-Apr-19 Bank of China Macau Branch (BOC Macau) China 4,500
5 15-Mar-19 Bank of Communications Hong Kong Branch (BOCOM HK) China 2,500