SHANGHAI Jan 28 China will kick off
cross-border yuan lending in a pilot zone near Hong Kong on
Monday, when eight to 10 Hong Kong-based banks sign agreements
for yuan loans to mainland Chinese firms for the first time, the
official Shanghai Securities News reported.
The agreements are a step towards opening China's capital
account and internationalising its currency.
The banks will include HSBC Holdings Plc ,
Hang Seng Bank, Bank of East Asia Ltd and
Hong Kong branches of several Chinese banks, such as the
Industrial and Commercial Bank of China ,
the newspaper said. It cited as its source an unidentified
financial official in the booming southern Chinese city of
China has announced that it would allow firms in Qianhai, a
special economic zone in Shenzhen near Hong Kong, to take out
yuan loans from banks in Hong Kong, with tenors and interest
rates to be set independently, also a major step towards
liberalising the country's interest rate mechanisms.
The newspaper said the collective signing of lending
agreements on Monday signalled the official launch of the pilot
programme for large-scale, cross-border loans.
More details about the banks and companies involved in the
first batch of cross-border loans will emerge at the signature
ceremony, it quoted the Shenzhen financial official as saying.
The project was first announced in June as Hong Kong marked
the 15th anniversary of its return to China.
The People's Bank of China has since said that the
cross-border yuan loan business would give Qianhai important
financial support and, at the same time, accelerate the
cross-border use of the Chinese currency.
The Chinese central bank has also said the move would
increase the scale of Hong Kong banks' yuan loan services and
bolster liquidity in the offshore yuan market.