Yuan expands cross-border trade plan

“The central bank is going to discuss with other government sectors the expansion of yuan’s trial settlement, to introduce more inland cities, industrials, and overseas partners joining the move.” Said Li Bo recently, leaving hopes to the exporters for risk prevention in exchange business. Li serves as department leader under the central bank.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

During the financial crisis, most of the exporters are cornered by the fall of orders from abroad, and, the same time added by sufferings of major currencies’ flaps. As the trial of yuan settlement in exertion since July of 2009, it provided the exporters an extra tool coping with those difficulties, but in view of the confinement of the trial, it’s unlikely to meet their demand, therefore there comes the calling for trial expansion.

“We would promise yuan’s convertibility if effected any time in the world, and would permit overseas’ renminbi holders to invest back to China, or through the method of commissioned financial business.” said Wang Daxian, official of Shanxi foreign exchange regulator, “to form a renminbi’s circulation, in other word, allowing it “going out” and “coming in” freely in help of domestic investment, would greatly facilitate yuan’s functions worldwide.”

Some insiders say the management of yuan’s flow-out would be much easier than foreign exchange, because of the difference existed in between.

Paralleled with cross-border settlement, the research is said as well on the way for yuan’s convertibility under capital account, though the former regarded much easier for operation.