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HK, Chinese mainland economic integration enters new stage
(Xinhua)
Updated: 2004-02-26 15:37
The Bank of China (Hong Kong) Limited, the clearing bank of personal reminbi (RMB, Chinese currency) services in Hong Kong, started from February 25 to offer clearing services for 39 Hong Kong banks that conducts RMB deposit, exchange and remittance services, a BOCHK spokesman said.
Financial experts here believed that the launching of personal RMB services in Hong Kong banks indicated that the economic integration between Hong Kong and the Chinese mainland has entered a new stage and will help enhance the exchange of visits between Hong Kong and the Chinese mainland.
They also believed that the launching of personal RMB services also helps push ahead with the further economic recovery of Hong Kong and consolidating Hong Kong's status as an International financial center as well facilitating the quickening of RMB internationalization.
In the past few years, with closer trade and economic links between Hong Kong and the Chinese mainland, RMB has become Hong Kong's No. 2 trading currency after Hong Kong dollars. The permission of Chinese residents in a number of cities to travel to Hong Kong on individual bases has brought to Hong Kong more Chinese mainland travelers.
As the Chinese mainland has been witnessing a strong economic growth in the past years, RMB has become more and more stronger. Quite a number of department stores and shops have already accepted the RMB payment.
Experts said the launching of personal RMB services will enable RMB to flow in a rational and open way in Hong Kong and will surely reduce the number of underground money changes and money laundering cases.
Besides, the launching of personal RMB services in Hong Kong also has a profound impact, financial experts said.
Firstly, they said, the launching of deposit service could extend the function of RMB in Hong Kong. In the past, Hong Kong's RMB holders only used RMB in the Chinese mainland both for personal purposes and for businesses. The new RMB service has in fact turned RMB into a saving tool. Hong Kong residents can have more choice in choosing a higher interest currency for deposits.
Secondly, the new services offer more development opportunities for RMB remittance and credit cards. Bank customers could take their RMB savings for remittance and the remittance fee is lower than that of the underground money exchange houses which could sharpen the banks' competitive edge.
While for Chinese mainland customers, they could use RMB credit cards for shopping in Hong Kong and could withdraw a limited amount of money from automatic teller machines. The BOCHK claimed Tuesday that it was trying its best to launch the RMB credit card services in a short period of time.
It is reported that over 500 million credit cards and bank cards have been issued in the Chinese mainland and the cards business has a great potential, experts here believed.
Thirdly, the launching of the new services also lays a foundation for building up an overseas RMB clearing system. Although RMB's international credit has been raising, RMB is not yet an actual offshore currency and it could not be exchanged freely.
Fourthly, Hong Kong's banking system could expand its net money claims in the Chinese mainland through expanding RMB asset services. Thus, Hong Kong could share more achievements brought about by the Chinese mainland's rapid economic growth and its exchange market and stock market are expected to be more vigorous.
Experts predicted that, if Hong Kong's banking system could absorb 30 billion yuan (3.61 billion US dollars) now circulating in Hong Kong, only the deposit service could yield a profit of 300 million yuan (36 million US dollars).
Experts believed that with the perfect legal and financial systems, the launching of personal RMB services could accumulate precious marketing experience which will help RMB go to the international market smoothly.
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