All sectors of Hong Kong welcomed the announcement Tuesday by the People's Bank of China regarding the expansion of the scope of renminbi (RMB) business in Hong Kong.

Hong Kong's Financial Secretary Henry Tang said these measures will further facilitate cross-border spending by mainland and Hong Kong residents and promote economic integration between the two sides.

"The agreement of the State Council to expand RMB business in Hong Kong helps strengthen Hong Kong's role as an international financial center," Tang said.

Chief Executive of the Hong Kong Monetary Authority (HKMA), Joseph Yam, said the expansion of RMB business would help improve the channel for RMB fund flows between the mainland and Hong Kong, paving the way for banks in Hong Kong to diversify their RMB business.

He added the authority would continue to work with the People's Bank of China in exploring the proposals for trade settlement in RMB and the issuance of RMB bonds in Hong Kong.

Vice Chairman of the Bank of China (Hong Kong) Limited (BOCHK), He Guangbei, said the central government agrees to expand the scope of RMB business in Hong Kong is "another major step in the reform and liberalization of RMB."

"The expansion of RMB business in a steady and orderly manner is conducive to further strengthening the economic integration between Hong Kong and the mainland of China, and providing greater convenience to the people of both places amid the ever increasing cross-border flows," He said.

He added that BOCHK will work closely with the People's Bank of China and the HKMA in relation to the clearing services to ensure that the local banking sector can launch the newly expanded RMB business very soon in Hong Kong.

Jeffrey Lam Kin-fung, councilor representing Hong Kong General Chamber of Commerce, praised highly of the arrangements that transportation, communication, medical services and education have been added to the list of designated merchants for RMB business.

"These measures will further consolidate the achievements of RMB business that we have gained since it was conducted a year ago. They will not only provide more convenience to mainland consumers but also explore more business opportunities for Hong Kong merchants," he said.

Bankee Kwan, chairman of the Hong Kong Retail Management Association, said that Hong Kong merchants will be more likely to accept RMB consumption because designated merchants can open RMB deposit accounts and exchange their RMB deposits into Hong Kong dollars according to the new arrangements, which is more convenient for both merchants and consumers.

Cheung Stephen Y L, professor of the City University of Hong Kong, said the new measures will greatly increase the RMB deposits in Hong Kong banks and promote flow of RMB in Hong Kong as well. " This will help upgrade the identification of renminbi," he said.

According to latest figures released by the HKMA, a total of 38 banks in Hong Kong are conducting RMB business and RMB deposits in Hong Kong amounted to 22.6 billion yuan (2.80 billion US dollars) so far in September.

Source: Xinhua