Our banknote printing plant at Tai Po produces notes that meet the highest international standards. Technological improvements now in progress at the plant will enable further security features to be incorporated into the design of Hong Kong's banknotes.
Last week we organised a visit to the Tai Po plant of Hong Kong Note Printing Limited (HKNPL) for Members of the Legislative Council. Thirteen Members took part in the visit: a most encouraging turnout. One of the objectives of the visit was to show the people's representatives the manner in which we handle one very important aspect of our currency - the printing of our banknotes. In doing so, we hoped to give the assurance to members of the public, through their representatives on the Legislative Council, that this important task is being conducted with the meticulous care that the community expects. I am glad that the comments we received during and since the visit suggest that our Legislative Council Members are satisfied on this point.
The Hong Kong Government, through the Exchange Fund, purchased the banknote printing plant at Tai Po from De La Rue plc in April 1996, when it was considered in Hong Kong's long-term interests for us to be in greater control of the printing of our own banknotes. We involved the three note-issuing banks as shareholders in the new company, HKNPL, by selling to each of them in October 1997 a ten percent stake in the company. Their involvement is logical, since they have a keen interest in ensuring that the printers of the pieces of paper which, when issued, become their liabilities do their job properly. Earlier in March 1997 we also sold a fifteen percent stake in the company to the China Banknote Printing and Minting Corporation (CBPMC), which is responsible for the production of coins and banknotes for the Mainland. This was for the purpose of tapping their experience and expertise in banknote printing, in addition to being able to continue to seek similar advice from De La Rue.
HKNPL has carried out its functions well over the past few years, coping comfortably with the replacement demand as old banknotes not meeting circulation quality are withdrawn and with the natural increase in the transaction demand for banknotes in Hong Kong. There are also other specialised printing jobs involving sophisticated intaglio printing that the company has picked up. Last year the plant coped well with the sudden jump in demand for banknotes arising from the need to cater for Year 2000-related contingencies. And this year HKNPL is making use of the slackening of demand, in view of the relatively high stock level of banknotes, to implement technological upgrades in the plant that will enable new and sophisticated security features to be introduced on the banknotes.
The design, printing and the subsequent handling of our banknotes meet the highest world standards. Forgery rates, however measured, are significantly below those of the major currencies in the world. But no amount of forgeries, however small, is acceptable. We must strive to make our banknotes even more difficult to counterfeit. This work is essential for upholding the integrity of, and public confidence in, our currency. It is also an increasingly complex task in view of the much more sophisticated technology now available in printing and, inevitably, also in counterfeiting. In any case, every effort has been made to tackle counterfeiting in a pro-active manner. In fact, the HKMA has just initiated a comprehensive review of the design of Hong Kong banknotes in conjunction with the three note-issuing banks. Since the review is still in its early stages, no specific conclusion has yet been made. But the aim is to prepare the next generation of Hong Kong banknotes so that they are adequately protected against counterfeiting not just for the time being but also for the foreseeable future. And whatever security features we use, they must as far as possible be readily recognisable by everyday users to be effective in discouraging counterfeiting. As Chairman of HKNPL and as Monetary Authority responsible for the integrity of our currency, I am confident that we can deliver.
Joseph Yam
13 April 2000
More information on the Notes and Coins of Hong Kong can be found here.
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