It is encouraging to see that Beijing plans to give Hong Kong companies preferential treatment, as reported in the South China Morning Post yesterday ('Beijing boosts SAR firms'). I am writing to suggest one thing Beijing could change to make investing on the mainland more attractive to foreign investors, especially those with a base in Hong Kong: allow banks in the SAR to open accounts in yuan and permit representative offices to be financed in yuan.
I run a company with representative offices in Beijing and Shanghai and we face problems in securing revenue as we are not permitted to accept yuan openly. In practice, we are forced to invoice through a third party who then converts the yuan to Hong Kong dollars on the black market so we can receive Hong Kong dollars in the SAR. We then remit the dollars back to the mainland to finance our operations. Our business operations would be greatly enhanced if we could simply receive yuan in Hong Kong and remit the yuan back to the mainland without restriction and without the need to go through a third party.
Ideally, we would prefer to open a wholly foreign-owned enterprise on the mainland but we accept this would take time once World Trade Organisation mandates come into effect. In the meantime, being able to operate in yuan would improve the short-term business prospects on the mainland for us and many other Hong Kong firms.
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