Nonetheless, China intends to further develop existing initiatives in this area. What opportunities will be opened up to China and the renminbi by having an offshore market, which clearly sets the renminbi apart from other freely tradable currencies? The Chinese government established the offshore renminbi market to expedite the transition from being a currency purely intended for trading to an investment currency.
By taking this roundabout approach, China is able to establish its currency internationally and protect its domestic financial system at the same time, until the government deems the capital market to have sufficient breadth and depth for a complete liberalisation.