Xinhua Assets and Equity Exchange, a wholly-owned subsidiary of a company under the state-owned Xinhua News Agency, officially opened its first offshore financial services center in Hong Kong on Tuesday as part of efforts to internationalize the country’s financial sector.
The Hong Kong-based Xinhua Daqing International Financial Services Ltd. will invite international traders of bulk commodities to sell their products to onshore companies through its trading platform in the city and the Shanghai free trade zone. The deals will be settled in renminbi.
The financial services center will also strengthen cooperation with overseas exchanges as the Shanghai-Hong Kong Stock Connect is expected to expand into the commodities market in the future.
“We should reach out to the world and participate in their trades first. After years of effort, we can have influence on the [commodity] prices,” said Chen Lei, chief executive at the Shanghai headquarters of Xinhua Assets and Equity Exchange.
Chen also stressed that the financial services center does not seek to compete with the Hong Kong Stock Exchange, but will cooperate with the exchanges in Hong Kong, Singapore, the United States and elsewhere and bring them to the mainland.
He said he cannot be sure when the commodity exchanges of Hong Kong and the mainland will be linked.
The financial services center is located at First Asia Merchants Bullion Ltd. in Wan Chai.
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