The People Republic of China has announced its decision to issue government bonds worth six billion yuan in former British Colony-Hong Kong, on September 28. A finance ministry official said that the move will strengthen Yuan's position in the international market, besides providing a pricing benchmark for mainland institutions.

China, having  the world's largest currency reserves of $2trillion, has been doing its best for making yuan an international currency, and the move has been seen as a means to promote yuan business in the southern Chinese territory. A spokesman for the Hong Kong government hailed the Chinese government decision and said: "It clearly demonstrates the central government's support for Hong Kong as an international financial centre."

The proposed bonds will be offered to both individual and institutional investors, as per prevailing market rules. The China government is much concerned about strengthening the currency instead of targeting financial returns on the issue of the bonds.

Ben Simpfendorfer, a Hong Kong-based economist at Royal Bank of Scotland, said: " A yuan-denominated bond issue would help corporate eventually issue yuan-denominated bonds and it would encourage the growth of yuan-denominated investment products in Hong Kong."