The Chief Executive in Council has approved to issue for trial a $10 polymer note, which is cleaner, more durable, secure and environmentally-friendly, in the middle of this year to circulate alongside the existing $10 paper notes and coins, both of which will remain legal tender.

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

New note: Monetary Authority Deputy Chief Executive Choi Yiu-kwan says the $10 polymer note will incorporate four new visible security features, including a clear window with a numeral 10.

More secure

Mr Tang said: "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."

Monetary Authority Chief Executive Joseph Yam said that the $10 polymer note will resemble the existing $10 paper note issued by the 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," Mr Yam said.

Security features

While retaining some of the security features of the existing purple $10 paper note, the new note incorporates four new visible security features specific to polymer notes:

* a clear window with a numeral 10;

* a watermark-like image of the bauhinia flower, integrated into the clear window;

* a watermark-like image of the numeral 10, which is visible when viewed with background light; and,

* the image of a ribbon on the clear window, whose colour changes between pink and purple when the note is tilted.

Illustrations and explanations of the security features and handling characteristics of the new polymer note are available here.

Mr Yam said: "Experience in countries which have introduced polymer banknotes indicates that the annual production cost for banknotes could be reduced by about 40% due to the longer lifetime of polymer notes despite a higher unit cost of production."

The cost for producing one polymer banknote is 56 cents, up to 40% higher than a paper note. Mr Yam said the 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.

Overseas experience

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

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

The polymer note is now being produced. It is expected to be available for circulation around mid-2007 and will be released gradually to ensure the smooth co-circulation of polymer and paper notes. Details will be announced nearer the time when the first notes will be issued.

Currently there are 150 million $10 paper banknotes in circulation, and the trial on polymer notes will last about two years.