*************************************************
The development of a Renminbi bond market in Hong Kong was significant for Hong Kong, for the Mainland and for the region, the Financial Secretary, Mr John C Tsang said today (August 2).
Mr Tsang, who is in Coolum, Australia, attending the 14th APEC Finance Ministers¡¦ Meeting, was speaking at a plenary session on global capital flow and strengthening investment in the Asia Pacific Region.
He said Hong Kong was the first place outside the Mainland to have a Renminbi bonds market. The first issue of such bonds last month (July) had met with a very enthusiastic response from investors.
He said the new renminbi bonds market had opened up a new channel for financial intermediation between Hong Kong and the Mainland, providing a new choice of renminbi denominated investment instrument for investors in Hong Kong.
For the Mainland, the development of such a market in Hong Kong provided a new funding avenue for Mainland users.
For the region, this development serves as a useful experiment for the use of renminbi in financial transactions in Asia.
During the same session, Mr Tsang stressed the need to help Small and Medium-sized Enterprises raise funds at lower costs.
Citing the Hong Kong example, he said that what could be done included the establishment of credit reference bureaus for SMEs to improve their transparency and the setting up of government-sponsored credit guarantee programmes.
¡§We can also develop securitisation and credit risk transfer to provide an alternative funding channel for SMEs at lower costs.¡¨
He said the topic of SMEs was highly relevant and important in discussing capital market developments and the general investment climate because SMEs formed the backbone of most economies.
¡§In Hong Kong, there are about 300,000 SMEs, accounting for 98% of business establishments, 60% of GDP and 60% of total private employment,¡¨ he said.
Earlier in the morning, Mr Tsang attended the Ministers¡¦ Retreat, the theme of which was "Global and regional responses to the economic challenges we face".
He urged APEC and other international forums to help address the risks and challenges faced by economies globally and in the region.
He felt that APEC could assist by encouraging and fostering collaboration on improving economic fundamentals and fiscal sustainability, removing trade and investment barriers, strengthening financial markets, improving corporate governance and legal structure.
At another session on energy security and climate change, Mr Tsang said that Hong Kong shared the concerns on high and volatile energy prices and Hong Kong agreed there was a need to manage the challenges of energy shock and greater energy efficiency.
¡§We also support further efforts to explore ways of co-operation among APEC measures in the transfer of efficient and clean development, as well as experience sharing on market-based mechanisms to reduce emission,¡¨ Mr Tsang said.
Mr Tsang will attend another session on transparency and sustainability of the public balance sheet tomorrow morning (August 3) before leaving for Brisbane where he will attend a Hong Kong Films Reception during the Brisbane International Film Festival where the film ¡§The Banquet¡¨ will be screened.
Ends/Thursday, August 2, 2007
Issued at HKT 15:15
NNNN
