Latest News:  


Deals signed for yuan loans

By Gao Changxin in Hong Kong and Wang Xiaotian in Beijing  (China Daily)

09:03, January 30, 2013

A stand for the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone at an international financial expo in Beijing. Fifteen lenders, including HSBC Holdings Plc, signed agreements on Monday to extend 2 billion yuan ($321 million) of cross-border yuan loans to companies in the Qianhai district of Shenzhen. [Photo / China Daily]

Lenders provide 2 billion yuan in cross-border funding to Qianhai area

The first batch of cross-border yuan loans agreements were signed on Monday after the central government approved the Qianhai area in Shenzhen to test a freer yuan before it becomes a global reserve currency.

A total of 15 lenders, including HSBC Holdings Plc and Industrial & Commercial Bank of China (Asia) Ltd, signed agreements to extend about 2 billion yuan ($321 million) of cross-border loans to companies in the Qianhai district of Shenzhen.

Qianhai is a $45 billion "mini-Hong Kong" project approved in June to test, among other things, freer yuan use and capital account convertibility. One of the preferable policies in Qianhai is for companies to borrow from banks in Hong Kong, with terms and interest rates to be set independently.

The signing on Monday marks the first time that yuan loans will not be extended according to benchmark lending rates set by the central bank. Interest of the loans will be set freely by borrowers and lenders, but the loans must fund projects from government-approved industries.

Dariusz Kowalczyk, a senior economist and strategist at Credit Agricole CIB, wrote in a research note: "We see this as a major development in testing interest rate liberalization, which will subsequently be allowed in the whole mainland."

Interest rate liberalization has been on the forefront of China's financial reform in recent years, as many economists believe that a government-managed interest-rate system stalls growth by misallocating financial resources. In a show of the government's determination to reform the system, the central bank last year for the first time allowed lenders to float their rates around the benchmark.

【1】 【2】

We recommend:

Wind power now No.3 energy resource

Software maker shows its dexterity

China caps first 3G nuclear plant

New Zealand moves to restore trust

Mobile apps chip away at SMS

Digital publishing sees solid growth in 2012


Related Reading

Leave your comment0 comments

  1. Name


Selections for you

  1. Navy's Yancheng missile frigate

  2. Submarine flotilla in torpedo rapid-support

  3. 3rd Qatar Int'l Auto Show kicks off

  4. Panda 'Yaya' trained in China's Shaanxi

  5. Buildings collapse after subsidence

  6. Dense fog stages a choking comeback

  7. Hangzhou Song and Dance Troupe

  8. Glamor actresses in 'Legend of Zhen Huan'

  9. China to build its first third-generation nuclear plant

  10. Nation's wind farms heading offshore

Most Popular


  1. "Sunny outlook" expected for Chinese economy
  2. Tackle challenges in farming sector
  3. Cities should keep memories of yesterday
  4. Single children 'little emperors'
  5. Domestic lenders need global outlook
  6. Flu awareness still lacking in China
  7. 'China's demographic dividend disappearing'
  8. Purpose of Japanese politicians' China tour
  9. Why world focus on China's anti-corruption
  10. Japan PM: Door open for talks with China

What’s happening in China

'Joint effort' urged to clear the air

  1. Young couples feud over festival homecoming
  2. Official cars ordered off roads during pollution
  3. Power plants should adopt multi-pollutant control
  4. Satellite center to put Wenchang on the map
  5. Kids more vulnerable to environment