The Chinese government promotes the cross-border use of the renminbi
2023-1-15
On January 11, the Ministry of Commerce and the People's Bank of China jointly issued the Notice on Further Supporting Foreign Economic and Trade Enterprises to Expand Cross-border Use of RMB and Promote Trade and investment Facilitation. It proposed that banks should be encouraged to carry out overseas RMB loans and support enterprises investing overseas and contracting projects to participate in the construction of "The Belt and Road". We will encourage overseas projects and enterprises that have real needs and meet the conditions to give priority to using RMB loans.
Document gist
1. According to the Circular, local commercial authorities and branches of the People's Bank of China should take targeted measures based on local conditions to create a favorable policy environment for the cross-border use of RMB.
2. We should actively promote the inclusion of cross-border RMB facilitation measures in relevant supporting policies, and where conditions permit, we can promote the inclusion of measures to optimize the business environment and relevant assessment targets.
3. In order to better meet the cross-border investment and financing needs of enterprises, the Circular encourages banks to jointly carry out overseas RMB loan business at home and abroad, supports enterprises investing abroad and contracting projects abroad to participate in the construction of "The Belt and Road", and encourages overseas projects and enterprises that have practical needs and meet the conditions to give priority to using RMB loans.
4. Support core enterprises in the supply chain, promote domestic and overseas enterprises, upstream and downstream enterprises to use RMB more, and promote the integrated development of domestic and foreign trade.
5. Promote state-owned enterprises to take the lead, and actively use RMB for exchanges between domestic and overseas enterprises within the Group.
6. Focus on supporting the New Lingang Area of the Shanghai Pilot Free Trade Zone, the Guangdong-Hong Kong-Macao Greater Bay Area, the Hainan Free Trade Port and other regions in positioning themselves to carry out cross-border RMB business innovation.
7. Continue to improve comprehensive financial services. Banks are encouraged to simplify cross-border RMB settlement procedures in accordance with the principle of "substance over form", and improve the convenience and efficiency of transferring funds to accounts.
We will create a favorable policy environment for the cross-border use of the RMB
At the Party's 20th National Congress, it was proposed that we should focus on the real economy. Upgrade the quality and level of trade and investment cooperation; We will promote the internationalization of the RMB in an orderly manner.
The move aims to further facilitate the use of renminbi in cross-border trade and investment, and better meet market demands for trade settlement, investment and financing, and risk management of foreign trade enterprises, according to the circular.
Local competent commerce departments and branches of the People's Bank of China should adhere to market-driven and independent choices of enterprises, explore and coordinate the needs of enterprises in industries in a timely manner, take targeted measures in light of local conditions, focus on addressing the "urgent difficulties and worries" of foreign trade enterprises, and create a favorable policy environment for the cross-border use of RMB.
Banks will be encouraged to conduct overseas renminbi loans
In order to better meet the cross-border investment and financing needs of enterprises, the Circular newly encourages banks to jointly carry out overseas RMB loan business at home and abroad, supports enterprises investing abroad and contracting projects abroad to participate in the construction of "The Belt and Road", and encourages overseas projects and enterprises that have practical needs and meet the conditions to give priority to the use of RMB loan policy to promote to the whole country.
According to the circular, local commercial authorities should actively review and reflect the RMB investment and financing needs of enterprises, and promote accurate docking between banks and enterprises.
We will include more foreign trade enterprises in our facilitation policies
Starting from the facilitation policies, the Circular proposes to carry out trials to facilitate the settlement of trade and investment in RMB at a higher level in an orderly manner, encourage banks to include more high-quality enterprises in the scope of facilitation policies, and encourage provincial-level self-discipline mechanisms for cross-border RMB business to share the list of high-quality enterprises.
For the core enterprises in the supply chain, state-owned enterprises and other enterprises with certain influence, the circular proposes to support the core enterprises in the supply chain, promote more use of RMB by domestic and overseas, upstream and downstream enterprises, and promote the integrated development of domestic and foreign trade. Promote state-owned enterprises to take the lead and actively use RMB for exchanges between domestic and overseas enterprises within the Group.
For micro, small and medium-sized enterprises, the circular said it would make it easier for them to settle cross-border trade and investment in renminbi.
The circular encourages banks to simplify cross-border renminbi settlement procedures to improve convenience and the efficiency of transferring funds to accounts in accordance with the principle of "substance over form".
Give full play to the role of the Hainan Free Trade Port and other platforms open to the outside world
The New Lingang Area of the Shanghai Pilot Free Trade Zone, the Guangdong-Hong Kong-Macao Greater Bay Area, the Hainan Free Trade Port and other open platforms have been playing a pioneering role in the internationalization of RMB.
Around these platforms, the Circular proposed to further enrich the use of RMB scenarios. For national-level economic and technological development zones, border (cross-border) economic cooperation zones and international exhibitions, banks are encouraged to provide "integrated" supporting comprehensive financial services for cross-border RMB settlement.
We will provide equity financing support for qualified RMB trade and investment projects
Special funds for foreign trade development will also play a role. According to the circular, local commerce authorities should make good use of special funds for foreign trade development, leverage more resources to provide public services for enterprises and support more use of RMB in cross-border trade and investment while complying with WTO rules. We will support the Guiding Fund for the innovation and development of trade in services in connecting its projects, and provide equity financing support to eligible RMB trade and investment projects.
The circular encourages local governments to carry out diversified publicity and training in innovative ways and strengthen horizontal coordination. Local commercial departments and branches of the People's Bank of China should communicate closely and strengthen coordination, and pay attention to the role of trade associations and chambers of commerce and self-discipline mechanisms. Where conditions permit, local governments may set up special working groups with the five relevant departments and financial institutions to share information and experience, and promptly study and solve difficulties and obstacles in advancing the work.