Renminbi trade in Hong Kong thrives rapidly

Cross-border trade payment from the China to Hong Kong amounted to RMB180bln while payments from Hong Kong to China reached RMB50bln.

The amount of cross-border renminbi trade settlement grew from a monthly average of RMB4 billion in the first half of 2010 to RMB30 billion per month from August to September, and then to RMB68 billion in October, Secretary for Financial Services & the Treasury KC Chan says.

He told legislators on Thursday that for the first 11 months last year cross-border trade payment from the Mainland to Hong Kong amounted to RMB180 billion while payments from Hong Kong to the Mainland topped RMB50 billion.

Professor Chan also said the amount of renminbi bonds issued last year exceeded RMB30 billion, with issuers including local and multinational firms as well as international financial institutions such as the Asian Development Bank, according to a government report.

He said there is no concrete timetable for the implementation of using renminbi funds in Hong Kong to invest in the Mainland securities market, also known as "Mini-QFII". The Government will maintain close communication with the Mainland regulatory authorities on this.

There is no evidence the linked exchange rate system is driving up inflation in Hong Kong, he said, adding, in fact in terms of inflation, Hong Kong compares well with other Asian economies that operate more flexible exchange rate and interest rate regimes.