Jan. 28 (Bloomberg) -- HSBC Holdings Plc, Industrial & Commercial Bank of China (Asia) Ltd. and 13 other lenders will provide about 2 billion yuan ($321 million) of cross-border loans to companies in the Qianhai district of Shenzhen.
Bank of East Asia Ltd., BOC Hong Kong (Holdings) Ltd., China Construction Bank Corp. and Standard Chartered Plc were also among the lenders selected, the municipal government said in a statement distributed today in the Chinese city that borders Hong Kong. The loans will support development and construction in the area, according to the statement.
Qianhai, a 15-square-kilometer (5.8-square-mile) zone, has been chosen as a testing ground for freer yuan usage and capital account convertibility. Companies in the area will be encouraged to sell yuan-denominated bonds in Hong Kong and to experiment with cross-border loans in the currency, the National Development and Reform Commission said last year.
“Cross-border loans in Qianhai will further accelerate the two-way flows of yuan,” Steve Wang, Hong Kong-based head of fixed income at BOCI Securities Ltd, a subsidiary of China’s fourth-biggest bank, said by telephone before the announcement. “China’s target is to make Qianhai a new financial hub similar to Hong Kong, which is free and vibrant.”
The People’s Bank of China has listed expanding cross- border yuan usage as one of its main goals this year. The central bank continues to support the development of offshore yuan markets in Hong Kong and as in other cities, according to a Jan. 14 statement on its website. Premier Wen Jiabao reiterated calls for financial reforms and gradual yuan convertibility last week.
Agricultural Bank of China Ltd., Bank of Communications Co., China Citic Bank International, China Development Bank Corp., China Merchants Bank Co., Dah Sing Banking Group Ltd., Hang Seng Bank Ltd., Nanyang Commercial Bank Ltd. and Wing Lung Bank Ltd. comprised the remaining lenders.
--Editors: Nathaniel Espino, Hwee Ann Tan