China to facilitate more yuan transactions, making international trade easier
China’s central bank announced on Friday that China will encourage companies to use the yuan in cross-border transactions and facilitate foreign investors’ use of the currency in direct investments.
This was published in a statement on the website of the People’s Bank of China, which has stated it will allow foreign institutions to use yuan in carbon emissions trading domestically.
According to the Daily Mail, Beijing has been promoting the international use of the yuan since 2009, and yuan settlement accounted for 16.9% of China’s total goods trade in 2016.
The People’s Bank say the move will “improve policies on yuan cross-border businesses, create a sound business environment and serve the ‘Belt and Road’ initiative”.
The central bank will encourage China’s banks to innovate their financial products so trade deals can be settled in yuan, and foreign investors can freely remit their yuan profits and dividends.
It will also allow Chinese firms to transfer funds raised from overseas bond and stock issuance back to China.
In addition, Chinese workers abroad will be able to more easily send money back home. It will also meet the demands of workers for cross-border yuan settlements in wages and social welfare.