China Expands Pilot Areas for RMB Settlement of Cross-Border Trade Transactions

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Jun. 29 – China has expanded the pilot areas of RMB settlements for cross-border trade transactions to 21 cities and provinces, and will also expand the pilot business scope.

A circular jointly issued by the People’s Bank of China, the Ministries of Finance and Commerce, the General Administration of Customs, the State Administration of Taxation and the China Banking Regulatory Commission expands the pilot implementation of cross-border trade RMB settlements to 21 provinces, autonomous regions and municipalities.

The pilot area now includes Beijing, Tianjin, Inner Mongolia, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Hubei, Guangdong, Guangxi, Hainan, Chongqing, Sichuan, Yunnan, Dalian, Ningbo, Qingdao, Xiamen and Shenzhen.

Furthermore, the pilot business scope includes goods traded services and RMB settlement of other current accounts. The new rules remove restrictions on where RMB settlement can be used for cross-border trade transactions. Previously this was limited to Hong Kong, Macau and the ASEAN member states.

The pilot RMB settlement of cross-border trade transactions is expected to further boost the trade and investment facilitation, according to the central bank.

1 thought on “China Expands Pilot Areas for RMB Settlement of Cross-Border Trade Transactions

    The_Observer says:

    The Chinese are obviously worried about the current economic state of the USA and Europe and the status of the USD and Euro. Unfortunately the history between the China, Japan and S. Korea prevents them from moving quickly to form a common currency and bond markets. The best the three countries governments can do is have currency swap agreements. However the experiment that China is carrying out with her immediate neighbors with RMB settlements might lead to Chinese RMB becoming a reserve currency for the latter group of countries.

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