Hony’s CEO: RMB free exchange coming soon

At the World Economic Forum in Davos, Hony's John Zhao told delegates that China will come to play a prominent role in international finance faster than people think, according to reports.

Hony Capital's co-founder and chief executive John Zhao cited examples of China's growing international activities to argue at the World Economic Forum in Davos that the RMB’s internationalisation is well underway, according to reports.

In a debate with Lawrence Summers, former US Secretary of Treasury, Zhao said a freer exchange of the RMB “will come much sooner than most of us expect”, according to a report from the National Business Review.

He cited Chinese Communist Party chairman (and future PRC president) Xi Jinping’s December visit to Qianhai, near Shenzhen, where a special experimental zone for RMB internationalisation was set up last year.

In an earlier interview with Private Equity International, Zhao said that his firm plans to be one of the pioneers in the special zone. “We’d like to raise our next RMB fund in Hong Kong and invest in China.”

At Davos, Zhao also pointed to China’s increasing outbound cross-border investment as evidence of the RMB’s growing prominence overseas. One of the primary overseas targets is Africa, according to a Business iAfrica.com report.

“We’ve invested in companies that are doing a lot of work in Africa,” Zhao was quoted as saying in the report. “We see the weak infrastructure in some African countries as an opportunity.”

China’s outbound investment more than doubled in 2012, according to figures from Thomson Reuters. Some of the most prominent deals have been Sany’s $408 million acquisition of Germany’s Putzmeister in partnership with CITIC Private Equity Funds Management as well as Shandong Heavy Industrial Group’s $931 million investment in private equity-owned Kion Group in Germany.