For instance, in the mining sector, the supply of goods and services has been taken up by private companies including those that can be classified as SMEs. Similarly, the transport sector, which was dominated by Government through the United Bus Company of Zambia (UBZ), Zambia Railways and Zambia Airways, etc, is now largely run by the private sector, consisting mostly of small and medium entrepreneurs. One can go on to mention the tourism, manufacturing, real estate, construction and others. This development is of great benefit to the economy in general and individual entrepreneurs in particular. Therefore, small- and medium-scale enterprises have the potential to make a significant contribution to the growth of the economy, thereby improving the economic welfare of the population. As you may know, SMEs in Zambia often have a direct impact on community development. Since they are usually based in places where the owners live, they draw upon the community for their workforce and rely on it to do business. They provide employment, particularly for low-skilled workers, as well as women and the youth, who usually make up the greatest proportion of the unemployed. However, this sector has faced difficulties in accessing credit for working capital and expansion of their investments. Mr Chairman, even if more SMEs wished to modernise their plant and equipment, they would find it hard to do so because of the difficulty of obtaining financing. Many banks choose not to provide credit to SMEs as they are perceived to be more risky and yet less profitable.
More importantly, deepening the offshore RMB liquidity pool will enhance market efficiency and underpin the growth of offshore RMB activities, strengthening Hong Kong’s development as a leading offshore RMB hub and its unique role in the internationalisation of the RMB. 7. There have also been significant developments in the internationalisation of the RMB as well: The establishment of an RMB Liquidity Arrangement by the People’s Bank of China and the Bank for International Settlements, announced in June, will provide support to participating central banks in times of market fluctuation. The HKMA is pleased to join the initial group of participating central banks in the Asia-Pacific region. The inclusion of Chinese Government Bonds in FTSE Russell’s World Government Bond Index is testimony to the acceleration in the international use of the RMB. The increased prominence of the RMB in international trade and foreign currency reserves was underlined in May when the International Monetary Fund increased the RMB’s weighting in its Special Drawing Rights basket from 10.92% to 12.28%, the first time the weighting has been reviewed since the RMB was added to the basket in 2016. Opportunities ahead – development strategy 8. The liberalisation of the Mainland capital markets in recent years has resulted in rapid growth in cross-boundary capital flows. Hong Kong’s mutual market access schemes with the Mainland, like Stock Connect, Bond Connect and now ETF Connect, have further catalysed this process by encouraging greater portfolio investment into the Mainland. 9.