RTTNews - Monday, China has commenced a pilot scheme for companies to settle cross-border trade transactions in the yuan or the renminbi, reports said.

Currently, some Shanghai companies have already agreed to settle deals with their Hong Kong and Indonesian trading partners.

The move is widely seen as China's attempt to globalize the use of the yuan in trade transactions, thereby lessening the use of the U. S. dollar.

On June 29, the Chinese central bank and the Hong Kong Monetary Authority had signed a supplementary Memorandum of Co-operation to prepare for the implementation of the pilot scheme for the use of renminbi in settling cross-border trade transactions between the Mainland and Hong Kong. Once the administrative rules are promulgated, banks in Hong Kong would be able to offer related services to firms using renminbi to settle trade transactions with their counterparts on the Mainland.

On July 2, China's Vice Foreign Minister He Yafei said that his country hopes for the diversification of the international currency system in the future.

In June, China reiterated its call for a new global reserve currency to replace the U.S. dollar. The People's Bank of China said there is a need to create an international reserve currency with a stable value in the long term to avoid the shortcomings of sovereign currencies for maintaining reserves.

In an essay published late March just ahead of the G20 summit in London, the PBoC chief Zhou Xiaochuan had repeated his call for a new global reserve currency managed by the International Monetary Fund.

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