China Approves Expanded Renminbi Business In Hong Kong

by Mary Swire, Tax-News.com, Hong Kong

12 January 2007

The Chinese government has agreed to a further expansion of renminbi, or yuan, business in Hong Kong which will allow Chinese financial institutions, upon obtaining approval, to issue renminbi financial bonds in the territory.

Welcoming the development, Hong Kong Chief Executive, Donald Tsang said this new category of renminbi business is conducive to business opportunities for banks and enhancing financial flow between Hong Kong and the Mainland.

"The further expansion of renminbi business in Hong Kong embodies the support of the Central Government in strengthening Hong Kong's position as an international financial centre," he stated.

Financial Secretary Henry Tang added that the move will promote economic integration between Hong Kong and the Mainland and provide channels for returning renminbi circulating in the city back to the Mainland.

The government is due to meet with People's Bank of China representatives next week to discuss the detailed arrangements.

Turning to the proposal of allowing Hong Kong importers to settle direct import trade from the Mainland in renminbi, Tang said the Central Government is still devising the management arrangement.

Hoping the proposal can materialise as early as possible, Tang said the Government will continue to liase with the central government.

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