Bank of China's cross-border yuan settlement tops 160 billion yuan

Bank of China's domestic branches handled more than 160 billion yuan worth of yuan-based cross-border trade settlements last year, which is more than 100 times the amount it handled the year before, a representative from the bank said.
Chris Cheng, general manager for global trade services of Bank of China's corporate banking unit, said at a news briefing the bank handled just 1.6 billion yuan of such settlements in 2009.
China launched a trial program under which companies can use yuan to settle cross-border trade in July 2009 and has been expanding the program in recent months.
"Judging by the current trend, the business turnover volume for this year will definitely surpass that of last year," Cheng said, adding Bank of China has more than a 30 percent share of the domestic market for cross-border yuan settlements.
Some 510 billion yuan worth of cross-boarder trades had been settled using yuan under the trial program as of the end of 2010, according to a statement from Bank of China.
It added it will expand its network for cross-border settlements and improve its products and services as the yuan circulates more overseas.
According to Industrial and Commercial Bank of China (ICBC), ICBC handled more than 150 billion yuan worth of yuan-based cross-border trade settlements between the end of January and July 2009.
China has stepped up its efforts in the past two years to gradually open its rigid capital account and loosen its grip on the yuan, which is being promoted for use in international trade and finance.
In early December, the People's Bank of China expanded the yuan trade settlement trial to include 67,359 exporters in 16 regions of the country, up from the original 365 companies.
The transaction volume of China's cross-border trade settled in yuan has increased sharply as the government approved pilot companies to use the currency in direct overseas investments.
In the first month of this year, Bank of China's total volume of yuan-denominated cross-border trade settlement reached about 40 billion yuan, one-fourth of the 160 billion yuan for the whole of 2010.
The People's Bank of China in January allowed some domestic pilot companies to directly invest overseas in yuan in order to expand yuan-settled business.
These pilot companies were from 24 provinces and cities on the mainland, including Liaoning, Zhejiang, Guangdong and Shanghai.
Hong Kong, the emerging yuan hub, is expected to provide more options for investors in the offshore yuan market, with companies issuing yuan-denominated bonds and with plans to sell yuan-based shares.
After China's government revised the settlement agreement on the clearing of yuan business in July 2010, Hong Kong handled 370 billion yuan in trade settlement last year, according to the Xinhua News Agency.