New Rules for Yuan Business Draw Tepid Reaction from HK Firms

The Hong Kong Monetary Authority's new measures for yuan business are receiving lukewarm reaction from firms who are concerned about the appreciation of the yuan and the limitations on sending funds to mainland China, reports the South China Morning Post.

 

The newspaper says that the new rules permit businesses to apply for yuan bank loans or lines of credit to finance projects. The authority is also now allowing companies to issue yuan bonds in the city. However, mainland regulatory approval is required if companies want to send the raised funds across the border, notes the Post.

 

"The yuan is appreciating, which means if you borrow in the currency now, you may need to repay more in the future," Edward Chow Kwong-fai, the chairman of CIG Yangtze Ports Capital, a Hong Kong-listed firm with port operations on the mainland, told the Post. ""If mainland banks or the authorities would allow companies like us to raise yuan in Hong Kong, and then use the funding to pay for wages and other expenses for our operations in China, then it would be helpful."

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