Shanghai Clearing House targets global growth with expanded offshore yuan push

China is pushing a new model to boost international sales of its domestic bonds, with the Shanghai-clearing-house" class="entity-link entity-organization" data-entity-id="173615" data-entity-type="organization">Shanghai Clearing House (SHCH) leveraging global financial networks to expand the offshore yuan pool.Writing in a recent article, SHCH chief Ma Jianyang noted that the initiative was designed to solidify Shanghai’s dominance in offshore yuan derivatives clearing while insulating the domestic market from cross-border financial risks.As part of this push, SHCH will broaden its clearing services for offshore yuan bonds, interest rates and foreign exchange products to help foreign investors hedge risk.“We will further enrich the supply of yuan central counterparty clearing products, expanding categories into bonds, interest rates, and foreign exchange to provide foreign investors with rich risk-hedging tools for overseas yuan assets, reinforcing our clearing dominance over yuan products,” Ma wrote in the article published on the social media account of China-finance-magazine" class="entity-link entity-organization" data-entity-id="173618" data-entity-type="organization">China Finance magazine last week.“We should study and formulate dedicated regulations or rules to unify the standardisation and overall supervision of central counterparty clearing, while exploring liquidity risk constraint and support facilities to stabilise market expectations,” said Ma, former deputy chief of the People’s Bank of China’s financial market department.The Shanghai-clearing-house" class="entity-link entity-organization" data-entity-id="173615" data-entity-type="organization">Shanghai Clearing House, affiliated with China’s central bank, is considered key financial infrastructure in Beijing’s efforts to expand its global financial impact and push yuan internationalisation.The move comes as Shanghai released an action plan to expand offshore business, including bond issuance in pilot free-trade zone and forex trading, amid the city’s efforts to become an international financial centre.