New Mexico companies that are setting up or already operating a branch in China might be able to cut the cost of borrowing by issuing Chinese renminbi bonds in Hong Kong, according to Donald Tong, the Hong Kong commissioner for economic and trade affairs.

Such bonds offset the risk of renminbi appreciation against the dollar, Tong said.

"Any New Mexico company that's interested in expanding operations in mainland China should seriously consider doing that," he said last week in Santa Fe.

Both McDonald's and Caterpillar did so, Tong said, adding that the interest rate on such bonds is only 2 to 3 percent, far less than it would be to borrow from a bank.

Marketing started recently in Hong Kong for Orix, the first Japanese company to issue renminbi (also known as dim sum) bonds.

Foreign issuance until now has been tightly controlled, since Chinese currency cannot be freely converted.

Tong spoke to members of the Santa Fe Council on International Relations, remarking that the high points of his visit to Santa Fe last week were the Georgia O'Keeffe Museum and San Miguel Mission.

In addition, "I am a huge fan of green chile peppers and green chile recipes," he said.

Tong said some people in the U.S. were concerned that Hong Kong might become an "empty shell" when China took over the country in 1997. But that didn't happen.

The One Country Two Systems arrangement with China is working well, Tong said, because the Basic Law grants Hong Kong a high degree of autonomy and protects its civil liberties.

"Our currency, the Hong Kong dollar, has been pegged to the U.S. dollar since 1983 and remains a key pillar of our financial stability," Tong said.

Tong also pointed out that Hong Kong ranked second out of 183 economies for its ease of doing business, according to the World Bank's 2011 "Doing Business Report."

Hong Kong's economic performance was strong in 2011, growing by 6.8 percent, with the unemployment rate declining to 3.6 percent.

In recent years, Hong Kong has been given a new role — as the testing ground for the mainland's financial reforms and liberalization of the renminbi, Tong said,

"Hong Kong currently hosts the largest offshore pool of RMB liquidity and is a place outside mainland China where international investors can invest in RMB bonds and other RMB-denominated financial products," Tong said.

When it comes to New Mexico-Hong Kong trade, Tong said the most recent trade data shows New Mexican companies exported more than $26 million worth of goods to Hong Kong in 2010.

Key exports to Hong Kong were computers and other electronic and metal products, Tong said.

On the lighter side, Hong said he had been asked whether he would favor Jackie Chan or Bruce Lee in a kung fu dust-up.

Tong pointed out that Jackie Chan himself said, "I don't think I could have beaten him (Lee) in a fight, and I wouldn't have been dumb enough to try."

So that's that.