Fifteen companies registered in Shenzhen's Qianhai zone borrowed a total of 2 billion yuan (US$318 million) in yuan loans from 15 Hong Kong banks to support 26 of their projects in a pilot yuan loan program officially started yesterday.

Interest rates of the loans were decided through negotiations between the lenders and borrowers, but definitely lower than the benchmark rate set on the mainland.

The lenders, including HSBC Holdings, Hang Seng Bank, Standard Chartered Bank, Dah Sing Banking Group, China Merchants Bank, signed contracts with 15 Qianhai companies, including Shenzhen Qianhai Development and Investment Co., consumer electronics manufacturer Konka and Internet giant Tencent, at a ceremony yesterday in Shenzhen attended by city leaders.

The State Council approved the pilot program in June to allow firms registered in Qianhai to borrow yuan loans from Hong Kong banks, aiming to internationalize the Chinese currency.

In an action to symbolize that the loan program was two-way from the very beginning, the Shenzhen branches of two mainland banks - China Construction Bank and Bank of Communications - extended loans of 620 million yuan to two Hong Kong firms at the ceremony.
(Source: Shenzhen Daily)