RMB global clearing network to speed up the layout

The People's Bank of China announced on July 4 that it has decided to authorize Bank of Communications, Seoul Branch, to serve as clearing bank for RMB business in Seoul, which is an important step in building a RMB offshore center in Seoul.
In the past two weeks, from the establishment of the RMB clearing bank in London and Frankfurt to the signing of RMB clearing arrangements with the Banque de France and the Central Bank of Luxembourg, the renminbi global clearing network has been frequently deployed and the pace of internationalization has been accelerated. However, on the whole, the process of RMB internationalization is still a long way to go.
On June 18, CCB became the RMB clearing bank in London. On the next day, BOC became the RMB clearing bank in Frankfurt. After a half month, Bank of Communications served as clearing bank for RMB business in Seoul.
Analysts pointed out that the arrangement of RMB clearing banks in Paris and Luxembourg will also be announced as soon as possible. In accordance with the layout of the five major firms in overseas view, the two clearing banks, the bank and the Agricultural Bank of China or a slice of it.
"With the establishment of RMB clearing banks in various countries and regions, the development of the RMB offshore market has been further promoted." Zong Liang, deputy director of the Institute of International Finance at the Bank of China, said that liquidation arrangements for European financial centers such as London and Frankfurt, The global layout of the RMB clearing bank has come out of Asia, represented by Hong Kong, Macau, Taiwan, Singapore and Malaysia.
The construction of an offshore RMB center needs the support of the real economy, and renminbi settlement arrangements have landed in Europe one after another, which is inseparable from the growing demand for clear settlement in the region. In 2013, China's foreign trade with Europe totaled 729.97 billion U.S. dollars.
Liu Lixin, senior strategist at Greater China in Deutsche Bank, believes Europe is very likely to become the second largest offshore renminbi market. China-EU Bilateral Settlement of Trade will use more Renminbi to forecast the amount of RMB-denominated bilateral trade between China and the EU to tripling in three years, accounting for 5% to 6% of the total size of China's global trade.
For enterprises, the establishment of liquidation banks will provide more convenient liquidation services for overseas enterprises' cross-border renminbi trade and investment activities. For commercial banks in China, becoming a liquidation bank means more extensive overseas business expansion.
Wang Hongzhang, chairman of China Construction Bank, said that on the basis of building a local RMB clearing network in the United Kingdom, CCB London's liquidation service will be expanded to neighboring regions in Europe, Africa and the Middle East as soon as possible, thus forming a global London-based clearing service.
"Even without being a clearing bank, many banks can accelerate the development of their overseas businesses through the establishment of a RMB clearing network and further promote the internationalization of the RMB," said Zong Liang.
While Bank of Communications was appointed clearing bank for RMB business in Seoul, Bank of China signed a memorandum of comprehensive strategic cooperation with the Korea Exchange and Korea Institute of Pre-trial Surplus on July 4, respectively. The Bank will work on R & D and promotion of Renminbi-related financial products and customer resources Sharing and other fields to start all-round cooperation.
After CCB became the London Clearing Bank, ABC and Bank also signed a cross-border strategic cooperation memorandum with the London Stock Exchange Group to promote RMB internationalization.
Experts said that more and more clearing banks are clearing directly outside the Asian time zone and can use the advantage of their time zones to provide more convenient conditions for the use of the renminbi for enterprises and to promote more efficient operation of RMB funds in Europe and the world at large.
"The establishment of an offshore clearing bank is an important step in the internationalization of the renminbi." Zhang Moanan, an associate researcher at the World Economic Research Office of the State Information Center, said that "liquidation-pricing-reserve" is an insurmountable three-step process for the internationalization of the renminbi and comprehensively improves the global renminbi Clearing the network and promoting the infrastructure construction of the RMB payment and settlement system are the key issues.
However, these do not mean that RMB internationalization is just around the corner. Data show that in the first quarter of 2014, the cross-border trade settlement of RMB reached 1.65 trillion yuan, an increase of 64% over the same period of last year. However, the overall scale is still relatively small.
Zhang Moan said that the current RMB internationalization process is still in its infancy, the use of the RMB global payment and settlement only 1.4%, in international trade using RMB denominated and settled less than 9%, RMB foreign exchange trading on the global foreign exchange daily average The proportion of trading volume is only 2.2%
Experts remind that the international financial structure has been formed over the years. The renminbi internationalization can not be accomplished in a single step. While actively promoting the innovation of financial products, we must guard against financial risks.