China pledges moves to spur HK economy

BEIJING – China’s Cabinet announced measures Wednesday aimed at boosting Hong Kong’s anemic economic growth as the semiautonomous territory prepares for a weekend visit by Chinese President Hu Jintao.

The Cabinet promised to promote Hong Kong’s status as a center for offshore finance using the mainland’s tightly controlled currency, the yuan. It said it would encourage closer trade, travel and investment links.

Hu is due in Hong Kong for weekend ceremonies marking the 15th anniversary of the end of British colonial rule and the inauguration of its third post-colonial leader, Leung Chun-ying.

The Hong Kong economy barely grew in the past quarter as exports shrank amid weak global demand. The government said Tuesday the economic outlook is ‘’challenging’’ due to Europe’s debt crisis.

Hong Kong retained its own currency and legal system with Western-style civil liberties following the 1997 return to Chinese sovereignty.

Beijing will encourage foreign investors to use Hong Kong for settling trade and investment contracts in yuan. It said regulators also will improve the variety of yuan-based services available through Hong Kong and facilitate investment from the territory in mainland stock markets. – AP