It follows from the two mutually independent monetary systems of the mainland and Hong Kong that the two monetary authorities will also be mutually independent. The Hong Kong Monetary Authority will be accountable solely to the Hong Kong government. The People’s Bank of China will not take the place of the Hong Kong Monetary Authority and will not set up any office there.
As Hong Kong and the mainland develop increasingly close economic ties in both trade and investment, close co-operation between the two monetary authorities becomes even more important. The two monetary authorities must, therefore, strengthen further the present sound co-operation of central banking functions, including monetary management, banking supervision and the development of the financial infrastructure. The third principle concerns co-operation in prudential supervision.