Shanghai boosts yuan's sway
By Zhang Fengming |
00:29 UTC+8 May 24, 2011
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Print Edition
Print Edition
SHANGHAI will encourage more institutions to issue yuan bonds in the interbank market as well as promote a trial which will allow residents to use the yuan to invest directly overseas, the local banking regulator said yesterday.
So far, 20 financial institutions have issued bonds in Shanghai under the central government's program to allow yuan accumulated overseas to repatriate to Chinese mainland since August 2010, said the Shanghai Bureau of the China Banking Regulatory Commission in a statement yesterday.
"Looking forward, we will attract more qualified institutions to sell bonds in Shanghai," the regulator said, adding that the plan to use the yuan to invest directly overseas is also being actively pursued.
Shanghai has also started a trial to allow non-banking financial institutions to pay bonus to overseas shareholders in yuan on a case-by-case basis. There is growing demand for such a trial due to the popularity of the cross-border trade yuan settlement. The yuan trade settlement has topped 160 billion yuan (US$25 billion) since the trial began in July 2009, accounting for 13 percent of the country's total.
Shanghai has also applied to allow local residents to invest directly in overseas markets, said a senior local financial official last week.
It is still awaiting approval from the State Council, China's Cabinet, to allow residents to invest overseas directly in yuan, rather than via companies, said Xu Quan, vice director of Shanghai Financial Services Office.
But they will only be allowed to invest in properties or corporations and not in the financial industry, Xu said.
The move will be a major policy breakthrough to help Shanghai cement its ambitions as a global financial hub by 2020, he added.
Shanghai will proactively push forward the program once it gets the nod from the central government.
The yuan trade settlement was launched in Shanghai and four cities in Guangdong Province in a trial in 2009 before it was extended to 20 provinces and municipalities last year.
So far, 20 financial institutions have issued bonds in Shanghai under the central government's program to allow yuan accumulated overseas to repatriate to Chinese mainland since August 2010, said the Shanghai Bureau of the China Banking Regulatory Commission in a statement yesterday.
"Looking forward, we will attract more qualified institutions to sell bonds in Shanghai," the regulator said, adding that the plan to use the yuan to invest directly overseas is also being actively pursued.
Shanghai has also started a trial to allow non-banking financial institutions to pay bonus to overseas shareholders in yuan on a case-by-case basis. There is growing demand for such a trial due to the popularity of the cross-border trade yuan settlement. The yuan trade settlement has topped 160 billion yuan (US$25 billion) since the trial began in July 2009, accounting for 13 percent of the country's total.
Shanghai has also applied to allow local residents to invest directly in overseas markets, said a senior local financial official last week.
It is still awaiting approval from the State Council, China's Cabinet, to allow residents to invest overseas directly in yuan, rather than via companies, said Xu Quan, vice director of Shanghai Financial Services Office.
But they will only be allowed to invest in properties or corporations and not in the financial industry, Xu said.
The move will be a major policy breakthrough to help Shanghai cement its ambitions as a global financial hub by 2020, he added.
Shanghai will proactively push forward the program once it gets the nod from the central government.
The yuan trade settlement was launched in Shanghai and four cities in Guangdong Province in a trial in 2009 before it was extended to 20 provinces and municipalities last year.
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