Major lender energizes moves toward a global yuan

Bank of China, the nation's fourth-largest lender by assets, is devoted to providing highly efficient, comprehensive and quality renminbi services worldwide. These will go a long way toward internationalization of the yuan.

With the continued opening up of China's capital account and financial markets since the beginning of 2015, the country has strengthened infrastructure for the global mobility of the renminbi.

During the first six months of this year, renminbi-denominated direct investment and cross-border trade between Chinese mainland and other countries and regions exceeded 4 trillion yuan ($629 billion), up 23 percent from the previous year. The growth rate was higher than that of China's foreign trade and gross domestic product.

According to the Society for Worldwide Interbank Financial Telecommunication, the renminbi has become the world's fifth-largest payment currency, sixth-largest transaction currency and seventh-largest foreign reserve currency.

In the first half of this year, as new opportunities emerged for the internationalization of the renminbi, Bank of China opened more than 1,400 renminbi clearing accounts. Its cross-border renminbi clearing business amounted to 148 trillion yuan and cross-border renminbi settlement exceeded 2.6 trillion yuan.

Bank of China's global yuan products cover a wide range of services, including settlements, clearing, deposits, loans and investment. At present, the bank has become a major provider of renminbi-based financial services in offshore markets. Renminbi assets of its overseas institutions have reached almost 1 trillion yuan.

Meanwhile, Bank of China is actively innovating in many emerging areas such as a centralized operation of cross-border renminbi funds, commodities trading, and cross-border investment and financing.

The bank carried forward renminbi-denominated spot gold trading on the Shanghai Gold Exchange and renminbi-denominated crude oil futures, as well as developed a number of renminbi-denominated bonds and derivative products.

It listed $4 billion worth of bonds in overseas markets in June to provide financial support for the Belt and Road Initiative, the economic blueprint proposed by President Xi Jinping in 2013 to develop deeper economic cooperation among countries along a trade and infrastructure network connecting Asia, Europe and Africa.

Besides, Bank of China also helped CADES, a sinking fund established to redeem French social debt, issued 3 billion yuan worth of offshore renminbi bonds in January along with several foreign banks, including HSBC Holdings Plc.

The bank has established a renminbi clearing system globally. It was authorized by the People's Bank of China, the central bank, as a clearing bank for renminbi business in Hong Kong, Macao, Taiwan, Frankfurt, Paris, Sydney, Kuala Lumpur, Hungary and South Africa.

Bank of China has been constantly promoting a wider use of the renminbi in emerging fields and offshore markets. It established cooperation with 20 major exchange organizations internationally and became a settlement bank for the world's leading exchange organizations, such as Chicago Mercantile Exchange Inc, the London Metal Exchange and Singapore Exchange Ltd.

The bank's overseas branches opened about 100,000 renminbi accounts for corporate clients and about 1.8 million renminbi accounts for individual clients.

Bank of China also launched the Cross-border Renminbi Index and the Offshore Renminbi Index, which together offer a comprehensive tracking system for the currency's internationalization progress.

jiangxueqing@chinadaily.com.cn

(China Daily 09/23/2015 page12)