A woman showcases the HK$10 polymer banknotes that have been approved to go on trial use within the year on Monday, March 12, 2007. The recyclable polymer note was introduced because it is more durable than paper ones and is environmentally friendly. [Photo: cnsphoto]

The government of Hong Kong Special Administrative Region (HKSAR) approved Monday to issue for trial a ten-dollar polymer note this year to circulate alongside the existing ten-dollar paper notes and coins, both of which will remain legal tender.

Hong Kong Financial Secretary Henry Tang said that the move aims to find out whether polymer notes are suitable for issue in Hong Kong and whether the community will accept them.

"Experience in countries that have introduced polymer notes suggests that they are cleaner, more durable and more secure. They are also more environmentally friendly, since they last longer and can be recycled for other use. As an international and vibrant city, there is a need for Hong Kong to explore this alternative technology for currency notes," Tang said.

Hong Kong Monetary Authority Chief Executive Joseph Yam said that the ten-dollar polymer note will resemble the existing ten-dollar paper note issued by the HKSAR government, except for changes to cater for new security features specific to polymer substrate.

"This is the approach often adopted in other countries when introducing polymer notes and avoids adding one more design to the existing legal tender notes," Yam said.

While retaining some of the security features of the existing purple ten-dollar paper note, the new note incorporates four new visible security features specific to polymer notes, including a clear window with a numeral 10, and a watermark-like image of the bauhinia flower, integrated into the clear window.

"Experience in countries which have introduced polymer banknote indicates that the annual production cost for banknote could be reduced by about 40 percent due to the longer lifetime of polymer notes despite a higher unit cost of production," Yam added.

The polymer note is expected to be available for circulation in Hong Kong around mid-2007 and will be released gradually to ensure the smooth co-circulation of polymer and paper notes.

The cost for producing one polymer banknote is 56 Hong Kong cents, up to 40 percent higher than a paper note, Yam said, adding that the HKSAR government will fully evaluate the performance of the new polymer note and its acceptance by the public, before deciding whether to convert any of the other denominations of paper notes to polymer.

Hong Kong Monetary Authority Deputy Chief Executive Choi Yiu-kwan said the authority has been exploring new note-issuing techniques to boost efficiency and effectiveness. Singapore, New Zealand and Australia have issued polymer banknote in the past decade.

Paper banknote usually last for three years. Overseas experience showed polymer banknote are three times more durable than paper ones, leading to a 40 percent cut in banknote production a year. On security, Australia saw the number of fake banknote down 63 percent, while New Zealand scored a 96 percent fall, after introducing polymer banknote.

Currently there are 150 million ten-dollar paper banknote in circulation in Hong Kong, and the trial on polymer notes will last about two years, the Monetary Authority said.

Workers show two bottles containing fragments of the new polymer banknotes in Hong Kong on Monday, March 12, 2007. The scraps can be reused for making polymer products. The environmentally friendly banknotes are expected to go on trial use within the year in the city. [Photo: cnsphoto]

Editor: Yan