Implementation Details Of Cross Border Use Of RMB In Shanghai Free Trade Area

The Central Bank of China issued Shanghai headquarters to support China. Shanghai "The notice on the expansion of cross border use of RMB in the free trade pilot area" further simplified the cross border use process of RMB under the regular and direct investment in the pilot area, and made specific norms for RMB's overseas loans, two-way RMB pool, cross-border RMB centralized payment and personal cross-border human currency business. This is of great significance to promoting the internationalization of RMB, especially the use of RMB in international trade.

　 The specific points of the rules are as follows:

The rules stipulate that non bank financial institutions and enterprises in the region can borrow renminbi funds from abroad, but the amount should not exceed the paid up capital multiplier multiplied by the macro Prudential policy parameters. The actual paid capital multiplier of the enterprises in the region is 1 times, and the non bank financial institutions' paid capital multiplier is 1.5 times, and the borrowing period must exceed 1 years. The enterprises in the region can set up special deposit accounts in banks in the Shanghai area according to relevant regulations, and can only be used in or outside the region, including production and operation in the region, project construction in the area, and overseas project construction. The bank loan funds in the district must enter the test ledger accounting unit.

The rules deepen the spirit of financial support for the real economy and support for the development of headquarters economy in Shanghai. Enterprises in the Shanghai free trade zone can carry out cross border two-way RMB pool business in the group, and the member enterprises that carry out regular cross-border RMB centralized payment and payment businesses can expand to enterprises outside the group and have close trade relations with the group enterprises.

The rules also provide relevant provisions for promoting cross-border e-commerce development in the pilot area, supporting the China foreign exchange trading center and the Shanghai gold exchange in providing cross-border RMB trading services in the region.

　　 Its emphasis is:

Loans from enterprises and non bank financial institutions can be deposited in the Shanghai area. Deposit account Interest is calculated according to the current interest rate. Borrowed funds can only be used in or out of the region, and shall not be used for investing in Securities (including financial products) and derivatives, and shall not be used for entrusted loans.

As for how to use the RMB cross border step in the future, Li Bo, director of the two division of the central bank's monetary policy, may be able to see the clues in an internal speech. His internal speech at the annual working conference on cross-border RMB business (revealed by the twenty-first Century net) revealed that the central bank's cross-border RMB business this year is divided into seven aspects:

　 First, we should further expand the current account. RMB Cross border use

Including further simplifying the cross border RMB business audit process, and exploring the development of cross-border RMB business under individual regular items, some pilot projects have been launched in Yiwu.

Judging from the current pilot projects in Yiwu, the third party payment companies which cooperate with the Bank of China can directly use RMB to carry out "Hai Tao", pay tuition fees for overseas study and order hotels, and domestic businesses can also obtain Renminbi loans directly, and cross-border RMB settlement is no longer a dream.

Li Bo further indicated that he would also try in Kunshan. This year, the central bank hopes to expand the pilot of cross-border RMB business under individual regular items, while exploring the possibility of allowing non bank financial institutions such as financial companies to engage in cross-border RMB business, allowing overseas listed companies to pay dividends dividends to overseas shareholders by using renminbi, etc., all of which are under the current RMB business.

　　 Two is to expand RMB cross-border investment and financing business.

The central bank encourages banks to make overseas loans for Renminbi loans, and there are some business volumes every year. Banks also reflected in the last few years that interest rates were not marketable and interest rates too high. Now that is not a big problem. The central bank has liberalized the lower limit of lending rates. Another complaint is that because the scale of RMB loans is not enough, even domestic projects are unable to support, and it is also difficult to support overseas projects. Therefore, it is necessary to provide preferential treatment for overseas projects in the allocation of desirable credit scale, which is also being studied by the central bank.

Li Bo said, at the same time, Shanghai free trade area, Suzhou Industrial Park, Tianjin eco city and other places also need to pilot two-way RMB pool, RMB equity investment fund and other businesses. The central bank will continue to explore domestic institutions to issue Renminbi bonds abroad, and continue to promote overseas institutions issuing Renminbi bonds in China. These are both RMB cross-border investment and financing businesses, and capital account convertibility business.

　 The third aspect is to continue to vigorously promote RMB valuation.

The market players are encouraged to use Renminbi in foreign investment and trade.

　　 The fourth aspect is (further expansion of monetary cooperation with foreign central banks and other institutions).

At present, China has signed currency exchange agreements with more than 20 countries, and many central banks have begun to include Renminbi in their reserves and invest in China's interbank bond market. This part will continue to expand gradually according to the requirements of steady progress.

　　 The fifth aspect is to continue to improve the clearing and settlement network of cross-border RMB business.

Including the construction of CIPS (RMB cross-border payment system), including more efficient cross-border RMB clearing and settlement plans in the offshore RMB market. We will further improve the RCP-MIS (cross border trade RMB settlement information system).

　 The sixth aspect is to actively promote RMB capital account convertibility.

This one mainly promotes the orderly opening of capital account with the market players, and establishes and improves the macro Prudential Management of capital flow. From the traditional microscopic examination to the macro Prudential Management, we can realize the facilitation of cross-border investment and financing, and on the other hand, the risk is controllable.

　　 The seventh aspect is to continue to actively support the pilot projects in the Shanghai free trade area.

The Shanghai free trade zone was officially launched at the end of September last year, and various ministries and commissions supporting the FTA have been unveiled. The Central Bank of China published the opinions of the people's Bank of China [micro-blog] on financial support for the construction of free trade pilot zones in China (Shanghai) in early December last year, which was divided into seven items and 30 items.