All firms can settle trade in yuan
Source: Agencies |
March 3, 2012, Saturday
|
Print Edition
Print Edition
CHINA boosted efforts to internationalize the yuan yesterday by widening its trade settlement rules to allow all firms in the country to invoice or pay for cross-border transactions in the Chinese currency.
The central bank's announcement that the new rules will be applied nationwide underscores the success of a two-and-a-half-year trial by China to globalize the yuan.
China has allowed a 30 percent revaluation against the dollar since 2005 and says it is committed to gradual reform.
"Companies that can settle their trades in yuan are no longer restricted to those selected for the pilot program," the People's Bank of China said in a statement.
"All registered exporters and importers can now settle their trades in yuan."
To promote the use of the yuan internationally, China allowed 365 firms to settle their trade in the Chinese currency under a pilot program in July 2009. The plan was expanded in 2010 to cover 20 provinces and regions and 60,000 companies.
The success of the trial led China to take the scheme nationwide in August last year, although exporters and importers were still required to get the approval before they could settle trades in yuan.
Total trade settled in yuan jumped fourfold to reach 2.08 trillion yuan (US$330 billion) at the end of 2011 from the previous year, the central bank said, or about 9 percent of China's total imports and exports for 2011.
The central bank said firms are not free of scrutiny under the expanded scheme. Those that flouted customs, trade and financial rules in the last two years will be put on a blacklist and cannot park their trade incomes abroad.
The central bank's announcement that the new rules will be applied nationwide underscores the success of a two-and-a-half-year trial by China to globalize the yuan.
China has allowed a 30 percent revaluation against the dollar since 2005 and says it is committed to gradual reform.
"Companies that can settle their trades in yuan are no longer restricted to those selected for the pilot program," the People's Bank of China said in a statement.
"All registered exporters and importers can now settle their trades in yuan."
To promote the use of the yuan internationally, China allowed 365 firms to settle their trade in the Chinese currency under a pilot program in July 2009. The plan was expanded in 2010 to cover 20 provinces and regions and 60,000 companies.
The success of the trial led China to take the scheme nationwide in August last year, although exporters and importers were still required to get the approval before they could settle trades in yuan.
Total trade settled in yuan jumped fourfold to reach 2.08 trillion yuan (US$330 billion) at the end of 2011 from the previous year, the central bank said, or about 9 percent of China's total imports and exports for 2011.
The central bank said firms are not free of scrutiny under the expanded scheme. Those that flouted customs, trade and financial rules in the last two years will be put on a blacklist and cannot park their trade incomes abroad.
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