CRI听力: Internationalization of the Yuan: More Opportunities and Responsibilities

China has decided to push the internationalization of the renminbi over the next five years. Earlier this month, after China and Russia quit the US dollar and resorted to their own currencies for bilateral trade, banks in Hong Kong are tapping into a 20 billion yuan standing fund in order to establish itself as an offshore center for yuan business. CRI's Wu Jia has the report.



In the wake of the news, many Chinese economists say that the yuan's internationalization is a natural process as well as a historic opportunity.

Zhao Changhui, an expert at the International Institute for Strategic Studies, says the next five years are a crucial phase when the government's monetary policies will play a leading role.

"The present market demand of renminbi is intense and direct, like the one in Hong Kong or Malaysia where people want to hold renminbi and trade in yuan. What we need to do is actually a political decision of when the RMB's full convertibility can be realized."

Speaking of currency internationalization, the most basic thing is its use in trade.

As such, China has much raised the number of Chinese companies that can settle trade in renminbi from 365 to more than 67,000.

Based on the data issued by the People's Bank of China, an estimated 200 billion yuan in Chinese imports will be settled in renminbi in the coming year.

Meida Foreign Trade Corporation Limited in Jiangsu Province is one of them. According to Zhang Zheng, manager of their transaction department, cross-border yuan trade settlement not only protects enterprises from the risks from yuan's appreciation, but also provides them with more opportunities in emerging markets.

"Some countries have shortages of foreign currencies. Through renminbi settlement, they can better operate their businesses. Presently, such countries are mainly from Asia, such as Thailand."

Although clients from the United States or Europe still rely on their own currencies, Zhang Zheng is confident that there will be more countries that would resort to the yuan, because its value is relatively stable.

With the overseas expansion of renminbi, China, as the issuer, will surely shoulder more international obligations and responsibilities.

Zhao Changhui says that the most important thing is to better monitor the amount of currency in worldwide circulation.

"Insufficient monitoring will lead to serious mismatching both in amount and in the ways currency is issued, which then harms the currency itself."

Moreover, there may be more crimes using renminbi as a medium of exchange, such as smuggling, drug trafficking and counterfeiting.

Taking these into consideration, China will be required to be equipped with a clear financial strategy, advanced management and also strong risk-control abilities.

For CRI, I'm Wu Jia.