City takes lead in renminbi globalization

Shenzhen has developed into a financial hub in South China in recent decades. Fan Shichao / For China Daily

The financial hub of Shenzhen in South China has been taking the lead in advancing the internationalization of renminbi, promoting the facilitation of cross-border renminbi settlement and exploring cross-border business innovation over the past decade.

Cross-border renminbi settlements in Shenzhen surpassed 3 trillion yuan ($417.9 billion) for the first time in 2021, a fivefold increase from 2012, according to statistics released by the Shenzhen branch of the People's Bank of China — the country's central bank — in late September.

Sixty-seven commercial banks and 97,000 companies have participated in Shenzhen's cross-border renminbi settlement targeting 189 countries and regions.

The PBC Shenzhen branch has taken on a number of pilot projects to facilitate renminbi settlement over the past decade. The moves have expanded the use of the Chinese currency in foreign trade, improved efficiency and lowered the costs for domestic companies as a result.

It launched a pilot project for cross-border renminbi asset transfer business targeting trade financing operations such as bank forfeits, bills and factoring in 2016.

The move could help domestic companies approach financial channels abroad and lower financing costs as a result. Overseas financial institutions are able to allocate high-quality assets in the country since the use of offshore renminbi is expanded, the branch's officials said.

By the end of August 2022, 17 banks had participated in the pilot project, with a total transfer amount of 197.22 billion yuan and a balance of 2.86 billion yuan. Overseas transferees were distributed in 16 countries and regions across the globe, statistics from the branch showed.

As a part of the pilot project, the central bank's Shenzhen branch has also guided local commercial banks to provide a package of financial services such as cross-border renminbi receipts, domestic clearing, and income and expenditure declaration for export-oriented e-commerce businesses.

Residents in Shenzhen and its neighboring areas have also been able to purchase personal cross-boundary investment products through the commercial banks under the Cross-Boundary Wealth Management Connect, a local wealth management scheme, since October 2021.