China officially launched the operation of the Cross-border Renminbi Trade Finance Transfer Services Platform (跨境人民币贸易融资转让服务平台) on 3 November.
On its first day of operation the platform facilitated 21 transactions worth 1.044 billion yuan for 22 financial institutions.
This included Chinese banking giant ICBC and Singapore’s United Overseas Bank, who worked together to complete a renminbi trade financing asset transfer for the subsidiary of one of China’s top 100 privately operated enterprises, involving the transfer of forfaiting assets under a renminbi international letter of credit.
A total of 64 institutions are already participants in the platform, including 24 domestic institutions and 40 overseas institutions situated in 15 different countries and regions.
The Platform was developed by the Shanghai Commercial Paper Exchange (上海票据交易所) under the guidance of the Chinese central bank, and is billed as a “comprehensive digitised platform for the provision of services in relation to cross-border renminbi financing for domestic and overseas financial institutions.”
SCPE chair Song Hanguang (宋汉光) said that the launch of the platform would help to raise trading efficiency and accelerate the circulation of goods and funds, helping to advance China’s “dual circulation” economy strategy.
“The Platform gathers together scattered market participants in a single place, and uses the online trading method of dialogue quotes as well as standardised electronic transaction forms and transaction agreements to replace the traditional one-to-one model, markedly raising transaction efficiency and market transparency” said Song.
“A high level of efficiency on the secondary market for cross-border trade financing will drive activity in primary markets, expediting a reduction in cross-border financing rates and reducing the financing costs for small and medium-sized enterprises that engage in foreign trade.”