China has given approval for mainland lenders to sell yuan-denominated bonds in Hong Kong, a key step for the Chinese currency in moving onto the international stage, a senior Hong Kong official said yesterday.
"This is the first time that mainland financial institutions are allowed to issue yuan-denominated bonds outside [of China]," said Joseph Yam (任志剛), chief executive of the Hong Kong Monetary Authority.
"This is the first step for the yuan moving towards the international stage; it's a very important step. And this happens in Hong Kong; I feel very encouraged by the move," Yam said.
The reaction elsewhere was equally positive, with Standard Chartered Bank calling it a significant move towards the ultimate goal of full yuan convertibility and integration of China's economy with the outside world.
"[It] facilitates more efficient cross-border capital flows and demonstrates China's determination to integrate more fully with the global economy," the British-based emerging market specialist bank said.
"If this new channel provides Chinese corporates, not just financial institutions, [the opportunity] to tap the bond market in the future, it could improve their funding structures and put pressure on domestic bond markets to further deregulate," it added.
Hong Kong Chief Executive Donald Tsang (曾蔭權) said Beijing's approval followed discussions held for over a year with the Chinese authorities.
"This new category of renminbi [yuan] business is conducive to business opportunities for banks and enhancing financial flows between Hong Kong and the mainland," he said in a statement.
Financial Secretary Henry Tang (
Hong Kong banks have been allowed four types of yuan businesses -- deposits, withdrawals, exchange and remittances -- since February 2004.
At the end of November, yuan deposits at Hong Kong banks totalled 22.6 billion yuan (US$2.9 billion).
Bank of East Asia chairman David Li (李國寶) said he believed the move could accelerate the appreciation of the yuan by 5 percent to 6 percent this year and predicted that savings held in the Chinese currency would grow five-fold over the next two years.
The yuan was pegged to the US dollar until 2005 when Beijing decided to revalue and put the unit into a currency basket system, allowing a greater but still tightly controlled margin of flexibility.
Partly inspired by the move and news of a record trade surplus for last year, the yuan rose to a post-revaluation high of 7.7970 against the dollar yesterday.
China's soaring trade surplus -- US$177 billion last year -- is a constant cause of dispute, with the US charging that the yuan is kept deliberately undervalued to boost Chinese exports.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS