International Business Will Open With Use Of RMB Yuan
The growing use of the RMB Yuan as an international currency will open up new business growth areas not only in China but globally, a director at audit firm Ernest & Young in Luxembourg said this week.
“The RMB internationalization and continued development are expected to open up new business growth areas for the business community not only in China but also in Europe and globally,” said Amanda Yeung, Director of Financial Service – Business Development, Ernst & Young Luxembourg S.A..
Ms. Yeung said the increased internationalization of the Chinese currency would “provide a plethora of new opportunities for foreign banks and Chinese banks across a range of areas”.
These will include, trade settlement, offshore lending, offshore deposits, offshore and onshore investment products, and offshore raising of capital, said the financial expert.
Benefit from the RMB Yuan internationalization, according to her, Chinese companies, in particular privately owned enterprises and small and medium enterprises, will be able to use RMB Yuan for cross-border trade instead of a foreign currency in order to avoid foreign exchange costs as well as exchange risk.
“European corporates settling in RMB will be able to do business with more companies in China. It will help these European companies to expand their clientele and raise sales volume,” she added.
According to Ms. Yeung, China, being the 2nd largest economy in the world, is a Key contributors to global growth. China’s continued expansion has dramatically changed economic prospects globally.
“One of the dynamic changes we see is the rise of the RMB and the predominant increase of the status of this currency in the global arena. Not only do we see changes in economic development but also profoundly in the world’s financial system,” she said.
The recent policy, proposed by China’s 13th 5-year plan for national economic and social development, stresses on “bi-lateral” opening of the financial sectors, the Chinese financial sector can learn from international industry peers and thus improve their competitiveness in global standards.
“It also allow both Chinese and western financial institutions to coordinate and use the domestic and foreign capital market in a more effective manner,” she added.
With the Belt and Road initiative and the newly launched European Fund for Strategic Investment, Ms. Yeung said this year marks “a new era of Sino-European cooperation”.
The 2 funds will jointly invest in the real economy in Europe, a Key part of the Belt and Road initiative, and boost global economic revival.
Stay tuned…
HeffX-LTN
Paul Ebeling
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