RMB use in foreign trade may increase

2023-01-13 08:27:32China Daily Editor : Li Yan ECNS App Download

Gov't, PBOC in joint drive to cut exchange rate risks, capital costs of enterprises

China will step up efforts to expand the use of the renminbi in cross-border trade and investment, the Ministry of Commerce said on Thursday.

Shu Jueting, the ministry's spokeswoman, told an online news conference that the ministry and the People's Bank of China, the country's central bank, will direct their local branches to take specific measures to implement a newly released circular on expanding the use of the renminbi in cross-border trade and investment.

They will jointly urge local authorities to report enterprises' relevant needs in a timely manner, in order to expand the use of the renminbi in cross-border trade and investment, while motivating financial institutions to provide innovative and quality products and services to enterprises, she said.

The moves are part of the country's broader push to facilitate foreign trade growth and stabilize enterprise operations, experts said.

The ministry and the central bank recently issued the joint circular, which underlined the positive role of cross-border renminbi use in serving the real economy and promoting trade and investment facilitation.

"Using the renminbi in cross-border trade and investment can help enterprises control risks associated with exchange rate fluctuations and manage the cost of capital to achieve stable operations," Shu said.

"Against the changes in international economic and financial context and increased fluctuations in the exchange rates of major currencies, enterprises have developed a stronger desire for renminbi settlements. Their demand for cross-border renminbi investment, financing and risk management has also increased remarkably," she said.

The joint circular asked the authorities concerned to study and match the needs of industries and enterprises in a timely manner and take targeted measures in accordance with local conditions, to create a good environment for the cross-border use of the renminbi.

The circular urged banks to provide more convenient and efficient services for cross-border settlements in the renminbi. It also encouraged banks to extend renminbi-denominated overseas loans and highlighted the capability of certain platforms in boosting cross-border use of the renminbi. Such platforms promote China's opening-up policy, and include pilot free trade zones, Hainan Free Trade Port and overseas economic and trade cooperation zones.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said renminbi pricing and renminbi settlements are becoming increasingly popular among enterprises undertaking international trade and investment, mostly because China's role in the global economy is growing, and the infrastructure for cross-border use of the renminbi continues to improve.

Shu said China will step up efforts to stabilize foreign trade growth while also improving the quality of its trade. Related measures will focus on stabilizing foreign trade enterprises and export orders, and helping enterprises solve problems.

The ministry and business chambers will facilitate enterprises to participate in overseas expos and other events to land orders, attract more overseas enterprises to expos like the Canton Fair, and direct enterprises to make better use of export credit insurance policies, in order to boost their confidence in accepting orders.

The authorities will offer guidance to enterprises so that the latter could benefit more from supportive policies, such as inclusive finance and those stabilizing employment, while financial institutions will provide more credit support to foreign trade enterprises, especially micro, small and medium-sized enterprises.

China also recently announced that nine regions, including Beijing, Shanghai and Jiangsu province, had been selected to carry out pilot programs for the integrated development of domestic and foreign trade.


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