Won The Yuan Trading Directly To Start The Sino Korean Free Trade Zone Received Attention

The ROK yuan direct trading between banks between China and Korea was officially launched in December 1st. In the future, the interbank Korean won won't need to be converted into dollars in the future. Only through the designated direct trading market makers can the exchange transactions between the RMB and the won be carried out directly, which can greatly save exchange fees and other expenses. Analysts pointed out that in the recent round of negotiations between China and South Korea free trade area, the two sides conducted in-depth consultations on Trade and investment, and are expected to sign the FTA between China and South Korea next year. The interbank direct currency transaction between China and Korea has already sounded the prelude to the FTA of China and South Korea, and is expected to cause widespread concern in the market.

　　 Direct interbank currency transactions start in China and Korea

According to reports, the ROK won the direct trading of RMB between China and South Korea at 9 a.m. on December 1st. In the future, the RMB exchange rate between China and Korea won't need to be converted into dollars first. Only through the designated direct trading market makers can the exchange transactions between the RMB and the won be carried out directly, which can greatly save exchange fees and other expenses.

All along, South Korean individuals or enterprises can exchange Renminbi directly with banks in Korean currency, but banks have been short of large-scale Korean and Renminbi trading markets. Korean banks need to convert Korean won into U.S. dollars, and then exchange dollars for adult currencies through foreign exchange markets such as Hongkong. In July this year, the two governments agreed to establish a direct exchange trading mechanism between China and Korea. The South Korean government then set up the South Korean direct trading market. At present, the South Korean government has developed an electronic trading system, and will provide strong support for the direct trading market through the market maker system.

at present The Republic of Korea The 12 banks, including new Korea bank, friendship bank, industrial bank, industrial bank, Standard Chartered Bank, Citibank, exchange bank, Bank of communications, ICBC, Deutsche Bank, Morgan Chase Bank and HSBC branch of Korea, have been designated as market makers. The 12 banks will offer two-way quotations for buying and selling in the interbank foreign exchange market, guiding transaction prices, improving market liquidity and promoting direct interbank transactions between Korean won and RMB. After the direct exchange is officially launched, the trading hours will be 9 a.m. to 3 p.m., and the minimum transaction unit will be 1 million yuan.

Insiders pointed out that RMB The direct trading of foreign currencies is much more profitable. It is also the only way for the internationalization of RMB. First, it helps to form a direct exchange rate of RMB against more foreign currencies; the two is to reduce the exchange cost of the main body of the economy; the three is to promote the use of RMB and foreign currencies in bilateral trade and investment; four, it is conducive to strengthening the economic and financial cooperation between China and foreign exchange countries. In addition, the direct trade between the RMB and the Korean won has a symbolic significance in the development of the offshore RMB market in Korea, which helps to reduce currency exchange and transaction costs and promote the use of RMB in trade and investment between China and South Korea.

　　 FTA between China and South Korea Next year is expected to sign.

Over the past 30 years, the economic exchanges between China and South Korea have developed rapidly, and the scale of trade and investment between them has been expanding. In terms of trade, bilateral trade has seen a rapid growth since the establishment of diplomatic relations between China and South Korea in 1992. In 2013, bilateral trade in goods between China and Korea exceeded US $270 billion. In the first quarter of 2014, the trade volume between the two countries reached 67 billion 630 million US dollars, up 6.8% over the same period last year. From the perspective of direct investment, the direct investment between China and South Korea as a pillar and supplement of the two countries' mutual trade also occupies a very important position. In the first quarter of this year, South Korea invested $1 billion 625 million in China, an increase of 162.13% over the same period last year.

The Sino Korean FTA negotiations were launched in May 2012. In the sixth round of negotiations, the two sides proposed that the final liberalization of products accounted for 90% of the total commodity tax items. In the recent round of negotiations, the two sides have conducted in-depth consultations on Trade and investment, and have also initiated negotiations in areas such as rules of origin, technical barriers to trade, e-commerce, environment and other areas, and made positive progress. In the negotiations on the free trade area, China first proposed the negotiations on trade in services and investment with the national treatment and negative list mode before admission. For the first time, the contents of e-commerce and local cooperation were discussed in FTA negotiations for the first time. For the first time, a separate chapter on financial services and telecommunications services was set up. Judging from the outcome of the negotiations, the Sino Korean FTA negotiations really achieved the goal of "high-level, comprehensive and balanced interests" proposed by the leaders of the two countries. From the perspective of coverage, the FTA covers 17 areas, including trade in goods, trade in services, investment and rules, and will form the most extensive and rich FTA in China. Moreover, many industries in China will benefit from the Sino Korean FTA, especially the mechanical and electrical products, metal products and so on, including agricultural products (000061, stock bar). Similarly, most of the industry in Korea will benefit from it. As China and South Korea cut tariffs to zero, the two market integration will help the two industries to work in a larger market scope, form a value chain and enhance competitiveness. In the field of service trade, China has resolved the core concerns of the ROK in the areas of audio-visual co operation, outbound travel and the environment. The South Korean side has met the core price of China in terms of express delivery, construction and medical treatment. The two sides have also promised to give two years of employment and residence permits to investors and multinational intercourse personnel, and give business visitors a one-year multiple entry visa.

Insiders said that the high level has repeatedly stressed the importance of increasing Sino Korean Free Trade Zone negotiations. After the two sides concluded substantive negotiations, the Sino Korean FTA negotiations will enter the "sprint" stage. From the perspective of the process, the FTA between China and South Korea is expected to be signed next year.