Yuan boost eyed as Hong Kong’s mainland China spending hits HK$5 billion

Hong Kong’s government spent more than HK$5 billion (US$642.3 million) using the city’s currency on services or purchases related to mainland China in the last financial year, according to officials.

In comparison, the government only used 240 million yuan (US$33.7 million) annually to settle expenditures, in addition to payments related to its renminbi-denominated bonds.

Authorities are now exploring ways to increase payments in renminbi and expand its use.

“Since the amount of renminbi bonds issued by the government is increasing and there will be a substantial amount of renminbi stamp duty revenue in future, we will explore [ways] with relevant departments to pay government expenditure items in renminbi where practicable, including public works and related procurement,” a government spokesman said.

“With the increasing interactions between the mainland and Hong Kong, we expect that the government’s revenue and expenditure involving renminbi will grow.”

Chief Executive John Lee Ka-chiu said in his annual policy address in September that authorities would “consider settling government expenditure in renminbi under suitable circumstances”.