Hong Kong, January 15:

Hong Kong unveiled today a series of economic proposals as part of a wider move aiming to strengthen its status as a financial centre and to assist China’s rapid economic development.

A team of four groups published recommendations in a report advising the government on how to benefit from China’s 11th Five-Year Plan, which concerns the mainland economic development for 2006-2010.

“These recommendations are not solely about how Hong Kong can continue to strive for the best and keep our momentum in economic development amidst fierce global competition,” Hong Kong leader Donald Tsang said.

“More importantly, the targets and initiatives contained in the action agenda state clearly how our professional services in finance, logistics and trade can respond to and support the country’s rapid development,” he said.

The team, which has taken four months to draw up the report, has mapped out an action agenda setting out 50 recommendations and 207 specific measures, Tsang said, some of which have been discussed with the state leaders during his duty visit last month.

The report comes days after China approved mainland lenders to sell yuan-denominated bonds in Hong Kong, seen as a key step for the Chinese currency to move towards the ultimate goal of full yuan convertibility and integration of China’s economy with the outside world.

Today, the team said Hong Kong should be further developed as ‘China’s international financial centre of global significance’ and should serve as a testing ground for the Chinese currency to become fully convertible. It proposed an integration of the China and Hong Kong stock markets and to further relax rules on Chinese enterprises raising funds through listings in Hong Kong.

It said the city’s capability should be enhanced to handle yuan-denominated financial transactions.

“We believe that the mainland institutions should work closely with the Hong Kong counterparts to make maximum use of Hong Kong for overseas financial activities,” David Li, who was in charge of making recommendations on financial services, said.

“The window of opportunity will not last forever. If we do not act now, inertia will set in and business will gravitate,” he said. He said Hong Kong is still far behind other financial centres as a trading centre for bonds and commodity futures but believed the city has the infrastructure to catch up.

Li said Hong Kong could facilitate two-way cross boundary fund flows with China which will help address the increasing concern of external imbalances in the economy.

The report also said assistance could be provided for Hong Kong-owned factories in southern China’s Guangdong province to meet environmental standards and enforce measures to reduce air pollution, which has been a major concern in the territory.

Tsang added the recommendations wwould be studied in depth, and policies and implementation plans would be drawn up as soon as possible. He added some initiatives, which would be submitted to the Chinese government for approval, would commenced in the first half of this year.