China expands cross-border RMB businesses

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China's central bank said Friday that all companies qualified for foreign trade activities can conduct cross-border export settlement in yuan.

China's central bank said Friday that all companies qualified for foreign trade activities can conduct cross-border export settlement in yuan. [File photo]

The People's Bank of China said in a statement on its website that China expanded cross-border trade settlement in yuan to cover all goods exporters in order to "meet market demand and make foreign trade more free and convenient."

"Till now, all companies engaging in goods and service trade or other activities under the current account can choose to settle in yuan," the statement said.

To boost the internationalization of the yuan and facilitate trade, China launched a pilot program to allow 365 companies to conduct cross-border trade settlement in yuan in July 2009.

China expanded the pilot program to 20 provincial regions in June 2010, and to all parts of the country in August 2011. However, only those companies enlisted in the program had the right to settle cross-border trade in yuan.

The extension was a crucial step in boosting the cross-border use of yuan, a goal stated in the country's 12th Five-year Plan (2011-2015).

China's cross-border trade settlement in yuan under the current account hit 2.58 trillion yuan (409.65 billion U.S. dollars) by the end of 2011, according to data from the central bank.

By the end of 2011, China had signed currency swap contracts worth 1.3 trillion yuan with 14 countries and regions, the PBOC said.