A small revolution took place in the pockets and purses of Hong Kong’s residents in 1993, four years before the territory’s return to China’s sovereignty.
Coins in seven denominations, from 10 Hong Kong cents to HK$10, were minted with the Bauhinia blakeana flower – also called the Hong Kong orchid – on the obverse to replace the visages of the five reigning British monarchs that had adorned the city’s legal tender since Queen Victoria in 1863.
A new dollar note followed when Bank of China (Hong Kong) joined Standard Chartered Bank and HSBC as the territory’s third note-issuing bank. The bank portrayed its iconic I.M. Pei-designed headquarters building on the front panels of five denominations from HK$20 to HK$1,000, flanked by daffodils, the chrysanthemum, the lotus, the peony and the bauhinia.
The new coins and notes, planned to give Hong Kong residents a more personal feel of the change in sovereignty before the pomp and reverence of the official handover in July 1997 was shrouded in secrecy. For seven years, it was the top agenda item in the Sino-British Confidential Financial Dialogue from 1987 to 1997.
The choice “of the picture that was to adorn our coins was top secret, so much so that no single artist could be entrusted with the information,” said Hong Kong’s former de facto central banker Joseph Yam Chi-kwong, who was the deputy to the territory’s former Secretary for Monetary Affairs David Nendick in 1987 during the talks.
“One of the first things discussed was the politically delicate transition for banknotes and coins in Hong Kong,” Yam said in an interview with South China Morning Post. “The flower of Hong Kong was the most appropriate [choice], because it does not hold any political connotation.”
Her descendants showed up within years after they took the throne: Edward VII first appeared in 1902, George V in 1919, George VI in 1937, and Elizabeth II in 1955. The last banknote to be issued with Elizabeth II’s portrait was the rarely used 1 cent note in 1992, which ceased to be legal tender when it was demonetised in September 1995 along with all the other old notes.
A key tenet of the 1984 Sino-British Joint Declaration stated that the territory’s currency with “references inappropriate” to Hong Kong’s status as a special administrative region of China had to be “progressively replaced and withdrawn from circulation.”
“We had to get Britain to remove any reference to pre-1997 British sovereignty, [while] trying to convince the Chinese to accept a depoliticised design for our coins to be circulated through and beyond 1997,” Yam said.
Yam used photographs of the Bauhinia blakeana flower on the pretence of designing a logo for the Hong Kong Monetary Authority (HKMA), set up in April 1993 with him as the first chief executive of the de facto central bank. The flower was named after Sir Henry Blake, a keen botanist who became Governor of Hong Kong from 1898 to 1903.
A crowned lion from the city’s colonial-era coat of arms was scrubbed from the coin’s reverse, replaced with large Arabic numerals and an archaic version of Chinese characters for numbers that Yam commissioned from a calligraphic work.
The compromise was “not easy,” he said, adding that the decade to negotiate the finer details of the territory’s monetary system was “a piece of the financial system of Hong Kong in transition.”
As part of the 1984 agreement of “gradual” transition, older coins featuring the British monarch had to be kept in circulation after 1997, and could only be withdrawn in phases to avoid causing any disruption in the cash-dependent economy.
Almost three decades after the bauhinia’s debut, the HKMA has retrieved and withdrawn 900 million coins featuring pre-1993 designs from the economy. Old coins are sold to other mints or metal dealers for recycling through government tenders, the HKMA said.
But coins with Queen Elizabeth II’s effigy remain legal tender in Hong Kong, said the HKMA’s head of currency and settlement Samson Yuen, adding that about 5 per cent of the coins in active circulation in Hong Kong feature “old designs.”
The 1987-1997 Confidential Dialogue added Bank of China (Hong Kong) as the third note issuer in Hong Kong in 1994. It quickly surpassed Standard Chartered in market share, issuing 34 per cent of all bank notes in circulation in the city at the end of 2021, smaller than HSBC’s 56 per cent share but more than Standard Chartered’s 9.6 per cent.
During its debut, the Chinese bank used five of Hong Kong’s most iconic landmarks in the back panels of its notes, including the skyline of Central and Wan Chai (HK$20) and the Kwai Chung Container Terminal (HK$500) to “reflect the prosperity of Hong Kong,” a bank spokeswoman said.
Currency designs remained unrestricted even decades after the handover, giving artists free rein to let their imaginations roam. The 2010 series of HK$20 notes featured themes as diverse as the Chinese abacus on the back panel (Standard Chartered), a view of the Repulse Bay beach (Bank of China) and children celebrating the Mid-Autumn Festival (HSBC).
To mark its 150th anniversary in 2009, Standard Chartered even printed a one-of-a-kind HK$150 note, featuring a satellite image of Victoria Harbour on the front and half a dozen Hongkongers admiring the city from The Peak on the back. HSBC followed in 2015 with a HK$150 note that portrayed the city’s development over the years.
Standard Chartered’s 2009 note was his favourite, said Henry Steiner, the designer who first put HSBC’s bronze lions “Stephen” and “Stitt” on the bank’s HK$100 notes in 1973.
Three decades earlier when he got to work on the 1980 edition of Standard Chartered’s notes, Steiner dug deep into Chinese mythology to “add character” to the currency with mythical creatures.
“There is a clear hierarchy: the bigger the denomination, the bigger the [creature],” said Steiner, now 87. “The smallest denomination had a carp, the HK$50 was a tortoise, the HK$100 was a qilin, the HK$500 was a phoenix while the HK$1,000 was a dragon.” The thematic series was kept in the 1993 and 2003 editions until their withdrawal from circulation.
With its rich history and the myriad designs, Hong Kong became a haven for keen collectors of coins and currency notes. It was also confusing for the public. In 2018, the HKMA took a step towards standardising the themes of its legal tender, instructing the three note issuers to present their own variations of the same themes.
In the 2018 edition – the most recent in circulation – the HK$20 note featured yumcha, the routine gathering among friends and families in Hong Kong’s dim sum restaurants. The HK$50 featured butterflies on the back panel, the HK$100 portrayed Cantonese opera, the HK$500 was of Hong Kong’s Unesco-listed Geopark and the HK$1,000 was a representation of Hong Kong as an international financial centre.
The Hong Kong Note Printing Limited in Tai Po is responsible for the territory’s currency notes, with the capacity to run off 420 million pieces every year. The printing plant was taken over in 1996 by the local government from the De La Rue group of Britain, using the Exchange Fund, the city’s financial war chest.
Hong Kong’s government remains the controlling shareholder of the printer, with the HKMA’s current chief executive Eddie Yue Wai-man acting as its chairman.
A minority 15 per cent stake was sold to the Chinese central bank’s unit the China Banknote Printing and Minting Corporation (CBPMC) in March 1997 for HK$42.5 million, while 10 per cent was sold to each of the three note issuing banks for a combined HK$91.5 million seven months later that year.
There are 164 licensed banks in Hong Kong, operating about 1,100 outlets for a population of 7.5 million residents, making the city one of the most crowded banking centres on Earth.
Still, cash remains king in the local economy, even with the advent of eight branchless virtual banks, a raft of e-banking, online payment services and the ubiquitous Octopus contactless stored value card.
The HK$20 is the most commonly used denomination, representing about 35 per cent of all notes in circulation. The 10-cent brass coin – the lowest denominated coin since 1993 – made up about 25 per cent of all coins in circulation, said the HKMA’s Yuen.
The supply of money expanded with the growing economy. The number of currency notes in circulation tripled to 3.5 billion pieces as of June, from 1.1 billion in 1997 just before the handover. Coins in circulation soared 66 per cent to 6.8 billion pieces in June, from 4.1 billion in 1997, he said.
“Cash still plays an important role in daily transactions,” he said in a written response to SCMP’s queries, adding that the value of notes and coins in circulation has increased by 44 per cent over five years to HK$605.5 billion (US$77.2 billion).