CHINA-ECONOMY: INTERNATIONALISATION OF YUAN (RMB)
Li Yang, a researcher with the Chinese Academy of Social Sciences who had served as an adviser to China’s central bank, was quoted by South China Morning Post on September 13, 2017, as saying at a forum in Beijing that China made a mistake in promoting the use of the currency in trade and investment, but not in financial transactions. The second is that China’s home-grown cross-border yuan payment system – the cross-border interbank payment system – is not compatible with other payment systems. He said “There’s a lesson for us. We must promote the yuan’s use in capital markets and financial transactions as well, instead of focusing on trade and investment. Secondly, payment and settlement in the yuan is neither convenient nor efficient ... the yuan settlement system and foreign exchange settlement system is separated.”
(Comment: Beijing’s efforts to boost the international profile of the Yuan started in 2009 when it allowed exporters and importers in designated cities to settle cross-border trade in yuan.China’s government also encouraged the development of so-called offshore yuan markets in Hong Kong, Singapore and London.) |