China to expand cross-border yuan settlement
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China needs to expand the Renminbi, or yuan, cross-border settlement efforts when conditions allow, the People's Bank of China (PBOC) said Friday.
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| File photo. China needs to expand the Renminbi, or yuan, cross-border settlement efforts when conditions allow, the People's Bank of China (PBOC) said Friday. |
"It is necessary for China to seek appropriate timing to expand the cross-border yuan settlement to more cities, enterprises and overseas pilot areas," said an international financial market report released on the central bank's website Friday.
But the report did not detail the conditions for appropriate timing.
The foreign trade volume settled in yuan is still small compared with China's total foreign trade volume, said the report, without specifying figures.
Official figures from China's General Administration of Customs showed that the country's exports in 2009 stood at 1.2 trillion U.S. dollars, down 16 percent from 2008.
China's State Council, or Cabinet, announced in April 2009 a pilot program to allow exporters and importers in five cities -- Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan -- to settle cross-border trade deals in yuan.
The latter four cities are all in south China's Guangdong Province.
The Bank of China (BOC), China's largest foreign exchange bank, announced on July 6 last year that its Shanghai branch had received the first cross-border yuan trade settlement deal from the BOC (Hong Kong).
The government is considering enlarging the scope of cross-border yuan settlement from commodity trade into service trade, said the report.
Yuan settlement was in accordance with the market demand, said Cao Honghui, a researcher with the Chinese Academy of Social Sciences, but increasing the yuan's global acceptance would be decided by factors such as the country's economic development and the financial system development.
