| Yuan overtakes HK dollar for first time |
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| Wednesday,January 17,2007 Posted: 17:35 BJT(0935 GMT) th |
The value of the Renminbi (RMB) yuan overtook the HK dollar on Monday for the first time in history.
The central parity rate was announced at 0.99945 yuan to one dollar by the Chinese Foreign Exchange Trading System.
Chinese experts believe the yuan will remain superior for the time being as the yuan continues to appreciate.
The value of the RMB against the U.S. dollar hit a new high on Monday, with a central parity rate of 7.7938 yuan to one U.S. dollar, breaking the 7.80 mark.
So far, the RMB against the HK dollar has appreciated by six percent since China reformed its exchange rate system in July 2005.
A stronger RMB will strengthen the economic exchanges between the Chinese mainland and Hong Kong, said Chinese experts.
Hong Kong's tourism and retail sectors will be two of the greatest beneficiaries of an appreciated yuan, said Han Kui, vice general minister of the outbound tourism department of the China Youth Travel Service.
Mainland tourists heading to Hong Kong for shopping will spend more as the yuan appreciates, said Han.
Zhang Yansheng, a senior expert with the think tank of the National Development and Reform Commission, said a stronger yuan would make Hong Kong's high-end technology and services more attractive to the mainland companies, a boon to the service-led Hong Kong economy.
"The high-end technology and services were too expensive before and mainland companies have found it hard to cooperate with Hong Kong providers," said Zhang.
Official statistics showed that exports to the Chinese mainland accounted for about half of all Hong Kong exports in the first three quarters of 2006.
Zhang said a more valuable yuan might lead to a slight rise in the amount of poultry and fish products imported into Hong Kong from the Chinese mainland. But Hong Kong residents' daily expenses would not increase much and the rise in prices of these essentials would be mild, he said.
(Source: Xinhua English)
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