Hong Kong Government Advances Inclusion of RMB Counters in Southbound Stock Connect, Targeting Launch Before July Next Year
nashnova research
Hong Kong's SFC is preparing to include RMB-denominated stock counters in Stock Connect's southbound channel, targeting a go-live before July 1, 2027 — once in place, mainland investors will for the first time be able to buy Hong Kong stocks entirely in renminbi, eliminating forced currency conversion.
What is actually changing?
Under the current southbound mechanism, mainland investors must convert RMB to HKD before buying Hong Kong stocks, then convert back on exit — every round trip carries FX cost.
The new plan plugs HKEX's existing RMB trading counters — where some stocks already quote in both HKD and RMB — into Southbound Connect, letting mainland capital trade directly in RMB and pay stamp duty in RMB.
This means → for mainland investors, the FX friction of owning Hong Kong equities drops close to zero.
How far along is the process?
Christopher Hui (許正宇), Hong Kong's Secretary for Financial Services and the Treasury, said in a radio interview that authorities have been in close talks with mainland regulators. The holdup is system upgrades and technical integration.
He said the government wants to launch "as soon as possible," with a target of before July 1, 2027.
In plain terms = policy intent is clear; the only real checkpoint is whether the two sides' trading systems can be wired together on time.
Where does this fit in the bigger picture?
Hui framed the move as one piece of a broader push to expand offshore RMB use cases, alongside two other measures: a 7-day offshore RMB liquidity tender facility and the issuance of short-term offshore RMB debt instruments.
This reflects a systematic effort by Hong Kong to widen the "usable surface area" of the renminbi outside the mainland — from interbank lending to short-term bonds to equity trading, forming a full chain.
For the Hong Kong stock market, southbound inflows could expand materially if mainland investors can deploy RMB directly, since FX uncertainty has long been a hidden barrier.
Will paying government expenses in RMB undermine the currency peg?
Hong Kong's Five-Year Plan proposed paying some government expenses in RMB. Hui cited an existing precedent: payments to mainland healthcare providers under the Health Care Voucher Scheme.
Next steps under study: paying Dongjiang water fees and civil-service training fees to mainland institutions in RMB — expenses that are "already going to the mainland anyway."
He stressed that the government collects taxes in HKD and spends predominantly in HKD. The RMB share will remain small — no qualitative shift.
This means → this is not "de-dollarisation" of Hong Kong's fiscal system; it simply cuts out an unnecessary conversion step within an already multi-currency operating framework. The Linked Exchange Rate system is unaffected.
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