Chinese yuan Photo:VCG

The Ministry of Finance is set to issue 12 billion yuan (1.67 billion) of Treasury Bonds in Hong Kong Special Administrative Region (SAR) on Wednesday as the latest effort to attract foreign investment and promote the internationalization of yuan.
 
The first round of T-bonds totaling 12 billion yuan will be issued through a tender on Wednesday, comprising tranches of 6 billion two-year, 4 billion three-year and 2 billion 10-year bonds.
 
The Ministry of Finance announced on June 1 that it will issue a total of 30 billion of Treasury Bonds in Hong Kong this year in four tranches. The issuance size will be 12 billion, 6 billion, 6 billion and 6 billion, respectively.
 
Since 2009, the Ministry of Finance has issued 15 batches of T-bonds in Hong Kong.
 
Paul Chan, Financial Secretary of Hong Kong SAR said the move demonstrates the sustained support from the central government to Hong Kong's status as an international financial center and the premium offshore yuan trading hub.
 
"It is conducive to promoting the development of the Hong Kong bond market and attracting more international capital," Chan said.
 
Over the past decade, the issuance scale of yuan T-bonds in Hong Kong has increased from an  initial 6 billion yuan to 30 billion yuan this year, and the durations straddle from a single five-year period to two-year, three-year, and ten-year periods. 

The issuance of offshore yuan T-bonds can lead to an increase in foreign investment and consolidate Hong Kong's position as a global financial hub and its importance in the global financial market, Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Wednesday.
 
Foreign direct investment (FDI) in the Chinese mainland, in actual use, expanded 2.2 percent year-on-year to reach 499.46 billion yuan in the first four months of the year, according to the Ministry of Commerce.
 
Also, the move is also deemed conducive to boosting internationalization of the yuan, Dong said.

Howard Lee, Deputy Chief Executive of Hong Kong Monetary Authority said in an interview with the CCTV that many countries now hope to assign the yuan as a settlement currency for trade.