Bank of China â€“ rapprochement of the Yuan welcomed in Hong Kong
On January 10, Chinaâ€™s central government in Beijing signalled green light for issuing Yuan-obligations for financial institutions on the main land in Hong Kong.
This was an important step towards developing the town as testing site for the completely convertible Yuan.
The long-awaited announcement made by the Bank of China was welcomed in Hong Kong more than enthusiastically, since the city would profit to large extent from the Yuan-business.
Several more institutions from the main land are intending to introduce the Yuan and thus to facilitate the return of the Yuan-currency from Hong Kong to the mainland.
This would be a great advantage for Hong Kong, because by issuing Yuan-obligations, the debt-market could be developed and this could result in building up a broadly faceted financial multi-currency-structure, which would improve the cityâ€™s image as being an international finance-centre.
One day after the announcement, the Yuanâ€™s value went beyond the value of the Hong Kong Dollar, for the first time in 13 years. On January 11, the value of the Yuan corresponded to 0.9996 in relation to the Hong Kong Dollar, the highest value since 1994. Nevertheless, there were some reservations about the result, for as ca. 80% of food and many other goods that are offered in the city are imported from the mainland.
On the history of the Bank of China
â€žBank of Chinaâ€œ(BOC) is Chinaâ€™s oldest bank (founded in 1912) and one of the four largest banks of the country. By amounting assets of approximately $433 billion, it is also one of the Top 20 richest banks in the world. The BOC has gained wide reputation as being expert in foreign exchange dealing since 40 years and thus is seen as the most international bank of the country, having more than 580 branches and offices in 26 countries. Within the country, the bank operates a network consisting of 12.000 branches and nearly 200.000 employees.
Although the BOC itself is subordinate to the control of the Chinese government, itâ€™s Hong Kong subsidiary company â€žBank of China (Hong Kong) Limitedâ€œacts as first Chinese bank that got listed on the foreign stock exchange. It strives for building up the BOC to a market-and consumer-oriented institution for banking services of world-class, and this shall be reached by means of a stable corporate structure, which shall able to secure excellent services for a long time to come.