Core Viewpoint - The Hong Kong Monetary Authority (HKMA) is launching the "Renminbi Business Funding Arrangement" starting from October 9, 2025, to replace the previously introduced "Renminbi Trade Financing Liquidity Arrangement" and aims to support the use of Renminbi in the real economy [1][2]. Group 1 - The "Renminbi Business Funding Arrangement" has a total quota of 100 billion Renminbi and will be implemented in three phases [2]. - The new arrangement responds to the growing demand in the offshore Renminbi market and is expected to further enhance Hong Kong's position as a global offshore Renminbi business hub [2]. - The HKMA noted that the loan-to-deposit ratio for Renminbi in the banking sector increased from approximately 20% in September 2022 to over 90% by June 2025, indicating a significant rise in demand for long-term Renminbi loans [1]. Group 2 - The arrangement aims to provide enterprises with long-term Renminbi financing for trade, daily operations, and capital expenditures, thereby supporting the real economy [1]. - The HKMA's previous measures, including the introduction of the Renminbi liquidity arrangement in June 2012 and the trade financing liquidity arrangement in February 2025, were designed to address short-term liquidity issues in the offshore Renminbi market [2]. - The expansion of eligible funding uses under the new arrangement is expected to stabilize long-term funding sources for the offshore market, which has been limited by a liquidity pool of around 1 trillion Renminbi [2]. Group 3 - As the use of Renminbi in cross-border investments becomes more convenient, interest from foreign investors in Renminbi assets is expected to increase, promoting the internationalization of Renminbi assets [3]. - Strengthening regulatory coordination and cross-border cooperation is essential, including enhancing the interconnectivity of cross-border payment systems and improving financial infrastructure [3].