A snapshot of Hong Kong Photo: VCG

China's Ministry of Finance (MOF) on Thursday announced that it will issue 30 billion yuan ($4.2 billion) of treasury bonds in the Hong Kong Special Administrative Region (HKSAR) this year, as the country steadily promotes the development of offshore yuan business.

The MOF's bond issues in Hong Kong have stayed at about 20 billion yuan annually in recent years, but this year's quota of 30 billion yuan will be the highest since 2009. Experts said that the increase shows international investors' increasing demand for yuan-denominated assets, and it will further promote the yuan's internationalization.

According to the MOF, the yuan-dominated treasury bonds in Hong Kong this year will be issued in four batches, with the first batch of bonds worth 12 billion yuan, and other three batches worth 6 billion yuan respectively.

The MOF said it will issue the first batch of treasury bonds on June 14, which will be divided into three tranches of two-, three- and 10-year bonds.

HKSAR Finance Secretary Paul Chan Mo-po said on Thursday that "the HKSAR government greatly welcomes the Ministry of Finance's issuance of yuan sovereign bonds in Hong Kong for the 15th consecutive year. This demonstrates clearly the sustained support of the Central People's Government for Hong Kong's status as an international financial center and global offshore yuan business hub. It is conducive to promoting the development of the Hong Kong bond market and attracting more international capital."

"The issuance of yuan-dominated treasury bonds in Hong Kong will better meet the asset allocation needs of global investors for yuan-denominated securities. It will also strongly contribute to the process of yuan internationalization and demonstrate China's confidence and determination in opening-up," Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Thursday.

It will also contribute to the attraction of foreign capital as well as help consolidate Hong Kong's position as an international financial center and the world's top offshore yuan settlement center, Dong added.

Hong Kong is the world's largest offshore yuan hub, settling roughly 75 percent of global yuan payments outside of the Chinese mainland.

The clout of Hong Kong in handling offshore yuan business has been strongly backed by the central government. As part of this effort, the MOF kicked off the sale of yuan-denominated treasury bonds in Hong Kong in 2009.

Last year, the MOF issued 23 billion yuan of treasury bonds in the HKSAR, with each batch more than four times oversubscribed.

Dong said that investors' enthusiasm for the bonds showed their trust and confidence in China's development prospects, compared with unstable stock and bond markets in major countries and regions due to surging inflation in the US, Europe and other markets.