It would be implausible to assume that renminbi “internationalization” will be further developed without significant capital-flow deregulation. In fact, the current strict regulations on capital inflows to the mainland have gradually become an obstacle to the further development of offshore renminbi markets themselves. The need for issuance of renminbidenominated bonds, so-called dim-sum bonds, is after all limited.
In the Hong Kong renminbi offshore market, the amount outstanding of issuance of dim-sum bonds is currently around RMB 70 billion, which is much smaller than renminbi-denominated deposits of about RMB 600 billion. If China wishes to promote further the internationalization of the renminbi, it may be necessary to address the issue of capital account liberalization.