URUMQI - China selected the Xinjiang Uygur autonomous region as the country's first experimental region for cross-border yuan investment settlements on Friday.
The action is aimed at enhancing the development of Xinjiang and its economic relationship with neighboring countries, as well as helping enterprises avoid risks, said Hu Xiaolian, vice president of the People's Bank of China, at the launch ceremony jointly held by the bank and the regional government.
At the ceremony, Xinjiang was also announced as a new region for cross-border yuan trade settlements, following previous 20 provinces, regions and municipalities which had been selected as experimental locations since 2009, Hu said.
Cross-border yuan settlement refers to the use of the yuan in international trade and investment deals and allows non-Chinese residents to own yuan accounts, Hu said.
The step will largely facilitate investment and trade between Xinjiang and other middle and west Asian countries, said Nur Bekri, chairman of the region.
"Dollars and euros have experienced dramatic fluctuations since the financial crisis, which places many risks on our companies. A yuan settlement will not only clear trade blocks, but also effectively avoid those risks," said Zhang Jie, chief financial officer of Xinjiang Beixin Road and Bridge Construction Co Ltd, which has projects in Pakistan and Kyrgyzstan.
Allowing yuan settlements will primarily encourage companies of neighboring countries to use Xinjiang as their gateway to enter China, Zhang said.
The Xinjiang Uygur autonomous region, which neighbors eight countries, including Russia and Kazakhstan, is the main access route between China and middle and west Asian countries. It is also the region with the most ports in China.
