By King & Wood's Banking Group
Since the launch of the pilot program of RMB settlement in
cross-border trade transactions in July 2009, the volume and
complexity of the said transactions and the ancillary banking
businesses have been rapidly increasing. During the past two years,
the pilot program was carried out in 20 provincial regions. PBOC
plans to expand the pilot program to the whole country within this
year. In order to satisfy business and banking industry's
strong needs for policy transparency, regulatory authorities such
as SAFE and MOFCOM have issued various rules and guidelines aiming
to streamline cross-border flows of RMB. On June 8, 2011, PBOC
published a most recent circular 1
"Circular") which clarifies several
major issues relating to cross-border RMB transactions. Industry
feedback regarding the Circular has been positive and the Circular
has been interpreted as "a significant step towards the
internationalization of RMB" by the market.
