GOV.cn  Wednesday, June 27, 2007 
 
 
The China Development Bank (CDB)has announced that it will issue 5 billion yuan (about 657 million U.S. dollars) RMB bond in Hong Kong, in a sigh of enhanced economic cooperation between the Chinese mainland and Hong Kong.

"The issuance of RMB bonds here will strengthen Hong Kong's status as an international financial center," said Sung Man, professor at the University of Hong Kong.

The expanding of Renminbi business in Hong Kong will not only give local investors more choices but also help Renminbi develop into a capital instrument gradually, said Sung.

The expanding of Renminbi business is only one of a series of supportive measures for Hong Kong launched by the central government. After Hong Kong returned to the motherland in 1997, Hong Kong and the Chinese mainland enhanced economic and trade cooperation, which helped Hong Kong maintain its prosperity.

During the past 10 years, Hong Kong's economy suffered from a series of difficulties, including the Asian financial crisis and Severe Acute Respiratory Syndrome (SARS). To help Hong Kong get through, the central government has taken many measures and given "all-out support" to Hong Kong, said economists in Hong Kong.

In 2003, the Chinese mainland and Hong Kong signed the Closer Economic Partnership Arrangement (CEPA), scrapping tariffs on products manufactured in Hong Kong gradually, expanding market access for Hong Kong services trade to the mainland, and improving trade and investment facilities between the two areas.

By the end of April this year, the Chinese mainland has imported Hong Kong-made products worth 1.3 billion U.S. dollars and 1,753 Hong Kong-based companies have invested in the mainland under the preferential policies offered by the CEPA.

"The implementation of the CEPA shows the support of the central government," said Chu Man Fai, researcher with the Commercial Economic Research Center of the Hong Kong Polytechnic University.

Like the CEPA, the "Individual Visit Scheme" which was launched the same year also gave impetus to Hong Kong's economy. At that time, Hong Kong was hit by the SARS epidemic and tourism and retail business were among the most severely affected.

To rejuvenate Hong Kong's tourism industry, the central government in 2003 decided to allow mainland residents in some cities to go to Hong Kong more freely under the "Individual Visit Scheme."

In August 2003, one month after the implementation of the measure, Hong Kong's restaurant and catering industry reported a 20 percent rise in business volume on a year-on-year base. In the first half of 2004, Hong Kong received 10 million tourists from all over the world, including 5.66 million ones from the mainland areas. Among the mainland tourists, 1.6 million ones or one fourth came under the "Individual Visit Scheme."

So far, 49 mainland cities have been covered in the framework of the scheme. In 2006, Hong Kong received 25 million tourists from all over the world, registering an income of 120 billion HK dollars.

Hong Kong's stock market is also one of the beneficiaries of China's booming economy. In recent years, more and more companies from the Chinese mainland came to Hong Kong for Initial Public Offering (IPO). In 2006, Hong Kong's stock market launched IPO worth more than any other market except London, ranking the world's No. 2.

By the end of 2006, 367 mainland companies had been listed on Hong Kong's stock market, accounting for half of the Hong Kong's total market value and 60 percent of trading volume.