CHINA TO FLOAT FIRST YUAN BONDS IN HK

       Beijing will sell government bonds denominated in the mainland's yuan for the first time in Hong Kong this month, its Finance Ministry said yesterday, in a move to expand the international use of its tightly controlled currency.
       Some 6 billion yuan (Bt30 billion) worth of bonds will be sold on September 28, the ministry said. Hong Kong is a Chinese territory but has its own currency and regulatory system and often is used by Chinese companies to deal with foreign investors.
       DOLLAR CONCERNS
       The yuan does not trade on global markets despite China's huge foreign trade, but Beijing is gradually expanding its use abroad. Chinese officials have expressed concern about the stability of the dominant US dollar and also have called for creation of a new global reserve currency.
       Beijing signed a currency-swap deal with Argentina in March and has promised to lend yuan to the central banks of South Korea, Malaysia, Indonesia and Belarus in the event of a financial emergency. That could lead to the currency's use in private transaction.
       A few mainland institutions, including state-owned China Construction Bank and Bank of China, have issued yuan-denominated bonds in Hong Kong.
       Premier Wen Jiabao, the mainland's top economic official, has promised to strengthen trade and finance links with Hong Kong. Other officials have said it may become the centre for handling finance in yuan outside the mainland.
       "This measure has a significant impact on promoting the depth and breadth of the Hong Kong bond market and strenghthening Hong Kong's position as an international financial centre," the territory's government said in a statement.
       The Finance Ministry gave no details of who would handle the bond issue.
       Two banks-London-based HSBC Holdings and Hong Kong-based Bank of East Asia-in May said they had become the first non-mainland companies approved to sell yuan bonds.