The value of the Renminbi (RMB) yuan became larger than that of the HK dollar on Monday for the first time in history. The central parity rate was announced at 0.99945 yuan to one HK dollar by the Chinese Foreign Exchange Trading System.

Chinese experts believe the yuan will maintain its superiority as it continues to appreciate.

The value of the RMB against the US dollar also reached a new high on Monday, with a central parity rate of 7.7938 yuan to US$1, breaking the 7.80 mark.

So far, the RMB against the HK dollar has appreciated by six percent since the exchange rate system reforms begun by China in July 2005.

A stronger RMB will bolster economic exchanges between the Chinese mainland and Hong Kong, said Chinese experts.

Hong Kong's tourism and retail sectors will greatly benefit from an appreciated yuan, said Han Kui, vice general minister of the outbound tourism department of the China Youth Travel Service.

Mainland tourists heading to Hong Kong for shopping will have more spending power as the yuan appreciates, said Han.

Zhang Yansheng, a senior expert with the National Development and Reform Commission think-tank, said a stronger yuan would make Hong Kong's high-end technology and services more attractive to the mainland companies, a boon to the service-led Hong Kong economy.

"The high-end technology and services were too expensive before and mainland companies have found it hard to cooperate with Hong Kong providers," said Zhang.

Official statistics showed exports to the Chinese mainland accounted for around half of all Hong Kong exports in the first three quarters of 2006.

Zhang said a more valuable yuan may cause a slight rise in the amount of poultry and fish products imported into Hong Kong from the Chinese mainland. However, Hong Kong residents' daily expenses would not increase much and the rise in prices of these essentials would be mild, he said.

(Xinhua News Agency January 16, 2007)