Banking Regulatory Commission Adds More Banks in Cross Border Settlements
During a forum of the 6th Greater Mekong Subregion Week for Economic Corridors which ended in Kunming, an official from the provincial office of the China Banking Regulatory Commission said that the Hong Kong and Shanghai Banking Corporation, the Bank of East Asia and Hang Seng Bank has started their businesses in Yunnan once China opened its provincial cross border financial market. Then in 2013 China gave the go signal to Yunnan and its neighboring Guangxi Zhuang Autonomous Region to pilot financial reforms in their border regions to further promote the regional circulation of the yuan.
A local Chinese construction contractor knows too well the problems of not able to use the yuan in cross border settlements. An example is after he completed a project five years ago in Myanmar he had to bring over 300 million Myanmar Kyats in cash back home where he hired workers just to count the money. He said that counting that money themselves is such an inconvenience which also affect cross border trade. Being the world biggest exporter and second largest importer of goods, the international use of the Renminbi is not that commensurate with the importance of the country’s economic status.
The China Banking Regulatory Commission has also approved Malaysia’s major commercial bank Maybank and the Standard Chartered Bank Branches in Kunming to start offering services which raised the total number of overseas banks in Yunnan to seven. The Development Bank of Singapore and Wing Lung Bank are also tapped in the financial markets in the border province.
Using the Renminbi in the global market is starting to be an irresistible trend and the currency does not want to lag behind the other currencies which have been actively participating in cross border yuan settlements. In 2009, China started trials on cross border trade settlements in yuan in Hong Kong, Macao and other ASEAN countries along with selected locations.