Use of RMB in foreign trade on the rise

Increased use of RMB in cross-border trade with the Association of Southeast Asian Nations (ASEAN) depends on foreign central banks and merchants, a People's Bank of China official said on Saturday.

Use of the yuan for cross-border trade in Guangxi is expected to increase by 15 to 18 percent in 2012, according to Yang Xiaoping, governor of the Nanning Central Sub-branch of the People's Bank of China (PBC), head of the Guangxi Branch of the State Administration of Foreign Exchange (SAFE), and a deputy of the National People's Congress (NPC).

China has done a great deal to encourage the use of the yuan for cross-border trade, Yang told China Daily.

In June 2010, China expanded a pilot area from Shanghai and Guangdong province to 20 provinces, autonomous regions, and municipalities. At present, all enterprises with an import-and-export license are allowed to settle their foreign trade in RMB.

In 2011, China gave the green light to overseas investment in RMB gained by qualified foreign institutional investors in mainland securities markets.

Nanning, capital of South China's Guangxi Zhuang autonomous region, enjoys the advantage of a geographical connection with Vietnam and is the permanent venue for the China-ASEAN Business and Investment Summit and the China-ASEAN Expo.

There are 480 enterprises in Guangxi conducting the business of cross-border settlement. The volume of Guangxi's cross-border RMB settlement reached 38.6 billion yuan in 2011, topping eight other border provinces and 12 provinces in West China.

Eighteen percent of China's RMB settlements with ASEAN since June 2010, totaling 45.7 billion yuan, have been handled by Guangxi, whose GDP is less than 3 percent of the nation's.

Yang attributed this to Guangxi's close economic ties with ASEAN, as bilateral trade climbed to nearly $10 billion in 2011, accounting for 41 percent of the province's imports and exports.

As of the end of 2011, China's central bank had signed 500 billion yuan ($79 billion) worth of currency swaps with four central banks in Malaysia, Indonesia, Singapore and Thailand.