The People’s Bank of China last week expanded renminbi cross-border trade settlement from two to 20 provinces, municipalities and autonomous regions in China.
China’s central bank and the finance and commerce ministries said that a pilot program for using renminbi in cross-border trade had been “smooth, in good order, convenient, and popular among enterprises and banks” in Shanghai and four cities in the Guangdong province where it had been introduced.
The expansion of the program is part of China’s efforts to encourage the international use of the currency. To date, the program has only applied to trade with Hong Kong, Macau and members of the Association of Southeast Asian nations (ASEAN), but the new regulation will permit the use of renminbi in transactions between approved provinces and any country.
Meanwhile, Standard Chartered, together with officials from the Shanghai Municipal Office of Finance Service and the People’s Bank of China, promoted renminbi trade settlement in a series of road shows last week in three key North East Asia markets – Hong Kong, Korea and Japan. This follows similar events over the last six weeks in Europe across London, Frankfurt and Paris. ??
The road shows provided a channel for Chinese government officials to meet with Standard Chartered’s corporate and bank clients, together with market regulators and other stakeholders, and share developments on RMB cross-border trade settlement and potential business opportunities in China.
Standard Chartered’s Hong Kong operation was the first foreign bank to complete a two-way trade settlement with China in July 2009 and a month later, Standard Chartered Bank (China) became the first foreign bank appointed as the agent and settlement bank for RMB cross-border settlement.
The bank completed similar RMB road show events in Malaysia, Thailand and Singapore in March as part of the global RMB trade settlement road show series initiated by the bank this year.