HONG KONG: The yuan could have the right conditions to be an international currency in 20 years time, if the Chinese economy continues its fast growth, said former Hong Kong Monetary Authority (HKMA) Chief Executive Joseph Yam in Beijing yesterday.

Yam was appearing in public for the first time in his new capacity as Executive Vice Chairman of the China Society for Finance and Banking - a research institution operating under the People's Bank of China, when he attended a business forum with the theme "Post financial crisis - the development and reform of China's financial industry".

Yam, who was once named the world's best central banker, said with the rapid growth of economic and tourism activities, international demand for the Chinese currency is rising, and China should find ways to satisfy the market's needs.

He said the US dollar and the euro - the two major international currencies at present, are problematic with the United States and European governments deeply in the red.

But Yam admitted the path of the yuan's transformation to become an international currency will be long.

A graduate of the University of Hong Kong and with decades of experience in finance-related government departments, Yam said he wants to use his knowledge to offer advice to the mainland's financial sector. He added he wants to contribute to the cooperation between Hong Kong and the mainland in financial matters.

Yam's latest appointment ended months of speculation as to his future following his retirement as the head of Hong Kong's de facto central bank. He said in the past he would not join the private sector but would like to contribute to the mainland.

As head of the HKMA, he had overseen how Hong Kong dealt with several regional and global financial crises, including the government's efforts to prop up the local stock market during the Asian financial crisis shortly after Hong Kong's handover to China.

Yam said he will serve his new role in the China Society for Finance and Banking on a voluntary basis. The think tank is chaired by the Governor of the People's Bank of China Zhou Xiaochuan, who nominated Yam for his new position. Members of the organization include senior management from China's biggest banks as well as top academics and executives.

Yam is not the first senior figure from Hong Kong to serve in a high level mainland government financial organization. Current Executive Council member Laura Cha had previously served as a Vice Chairperson of the China Securities Regulatory Commission.

(HK Edition 12/23/2009 page4)