The People’s Bank of China (PBOC) and the Ministry of Finance (MOF) have jointly issued a directive outlining greater support for cross-border usage of the renminbi for trade purposes.
On 11 January PBOC and MOF jointly issued the “Notice on Further Supporting Foreign Trade Enterprises Expanding Cross-border Usage of the Renminbi and Expediting the Convenience of Trade and Investment” (于进一步支持外经贸企业扩大人民币跨境使用 促进贸易投资便利化的通知).
The Notice said its goal is to “increase the convenience of the usage of the renminbi for the pricing and settlement of various forms of cross-border trade and investment, and driving banks to provide more convenient and efficient settlement services.”
Provisions and goals of the Notice include:
- Expediting the convenience of high-level trade and investment.
- Increasing the convenience of cross-border renminbi settlement for services trade and various new forms of trade.
- Supporting renminbi pricing and settlement of commodities.
- Supporting foreign investors in using the renminbi for investment in China as well as domestic re-investment.
- Increasing the convenience of outsourcing project companies when engaging in concentrated management of offshore renminbi funds.
- Supporting China to engage in renminbi settlement for trade and investment with adjacent countries and regions and within the Regional Comprehensive Economic Partnership (RCEP).
- Encouraging banks to provide more convenient and efficient renminbi settlement services for real and compliant cross-border trade and investment.
- Fully employing the role of external opening platforms.
- Further diversifying renminbi usage scenarios.
- Focused support for the Shanghai Free Trade Pilot Zone, the Greater Bay Area and the Hainan Free Trade Port.
Pang Ming (庞溟), chief economist for Greater China at Jones Lang LaSalle, said to state-owned media that the Notice would be of benefit to employing the role of cross-border renminbi operations in servicing the real economy, expediting the convenience of trade and investment, and assisting the growth of foreign trade enterprises.
“It will be of benefit to establishing a new economic system with high-level opening, and orderly advancing the schedule for internationalisation of the renminbi.”