China will further expand its yuan settlement program for exporters across the country, reported the People’s Daily, citing a statement from the central bank. At the end of last year, 67,000 exporters already participated in the program.
This program allows exporters to conduct their trades and payment with foreign countries using the yuan instead of currencies like the US dollar.
Its expansion is partly in response to the growing international demand for the yuan and the increasing integration of China into the global economy.
Previously, China said it wanted to allow all exporters and importers to settle cross-border trades in the yuan by 2011.
Before that, it announced that bilateral trades with Russia and Malaysia will begin to be conducted with the yuan and the ruble and ringgit, respectively.
China has been gradually liberalizing its economic and financial system with respect to the outside world. After it emerged strongly from the global financial crisis, China began to ramp up efforts to make the yuan a global currency (including pushing for its global reserve currency status).
Moreover, it's beefing up domestic financial institutions and have allowed foreign companies to issue bonds denominated in the yuan.
The efforts of the Chinese government to further enter the international financial space, combined with the ever growing size of the Chinese economy, may propelled mainland China (and a city like Shanghai) to become a major international/regional financial hub in the future.
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