BEIJING (AP) - Beijing sold government bonds denominated in the mainland's yuan for the first time Monday in Hong Kong, adding to gradual moves to expand the international use of its tightly controlled currency.Bonds from the 6 billion yuan ($875 million) issue were on sale to the public at Hong Kong banks. There was no immediate word on how well they were selling and how many were allocated to institutional investors.
Hong Kong is Chinese territory but has its own currency and regulatory system and often is used by Chinese companies to deal with foreign investors. Beijing is gradually expanding the use abroad of the yuan, which does not trade on global markets. Beijing signed a currency swap deal with Argentina in March and has promised to lend yuan to the central banks of South Korea, Malaysia, Indonesia and Belarus in the event of a financial emergency.
Monday's sale should increase the private sector use of the yuan, according to finance analysts. A few mainland institutions, including state-owned China Construction Bank Ltd. and Bank of China Ltd., have issued yuan-denominated bonds in Hong Kong. Hong Kong leaders want to develop the territory as a center for non-mainland trading of the yuan. They hope the business will boost finance industries that have been battered by the global economic crisis.
Premier Wen Jiabao, the mainland's top economic official, has promised to strengthen trade and finance links with Hong Kong. Two banks - London-based HSBC Holdings and Hong Kong-based Bank of East Asia - said in May they had become the first non-mainland companies approved to sell yuan bonds.
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