No.6  June, 2010  
  RMB trade expansion hailed  
  Hong Kong’s Financial Secretary John Tsang has welcomed the expansion of a scheme allowing international trade transactions using China’s renminbi currency to 20 Mainland provinces and cities.

The move will mean more opportunity for companies doing business with Chinese enterprises, including companies in Australia and New Zealand.

The People's Bank of China announced on June 22 the scheme will be expanded to include Beijing, Tianjin, Inner Mongolia, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Hubei, Guangdong, Guangxi, Hainan, Chongqing, Sichuan, Yunnan, Jilin, Heilongjiang, Xizang and Xinjiang.

The scheme – launched last July – allows enterprises in designated provinces and cities to conduct international trade transactions in renminbi. This includes merchandise imports, service trades and other current account transactions, while an expanded list of eligible enterprises will be able to settle their merchandise exports in renminbi.

"This is certainly good news to corporates and the banking industry in Hong Kong," Mr Tsang said.

"With an expanded scope of trade transactions that can be settled in renminbi, corporates will be able to better manage any exchange rate risks associated with their operations.

"Our banks can also provide trade-related services to customers not just in Hong Kong but also other parts of the world."

Monetary Authority Chief Executive Norman Chan said the scheme's expansion will bring the development of Hong Kong's renminbi business to a new stage, adding he looked forward to working with the financial community to grasp the opportunities the move will bring.
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