More foreign firms seeking to use yuan in trade

More foreign firms seeking to use yuan in trade

BEIJING - More foreign companies want to use China's yuan currency in trade settlements with the world's second-largest economy, though a lack of investment products in yuan may constrain wider usage, a Bank of China survey showed.

Among foreign firms surveyed, 61 per cent said they plan to either start using yuan or broaden usage of the currency in settling cross-border trade, compared with 54 per cent in the bank's previous poll in 2012.

The survey released on Friday also found more than half of respondents expect the proportion of yuan settlement in China's total cargo trade to rise to 20 to 30 per cent in five years, up from 11 per cent at the end of May.

"Clients both at home and abroad continued to be positive about the internationalisation of the yuan and we can see that global acceptance of the currency is rising," Cheng Jun, general manager of the bank's corporate banking unit, told reporters.

The bank said the popularity of the Chinese currency is underpinned by a relatively stable yuan exchange rate as well as generally sound fundamentals of the Chinese economy.

The result was based on a poll of 2,943 companies in May, with 2,241 of them domestic and the rest from 23 countries worldwide.

Bank of China , the biggest lender in terms of yuan settlement for trade, said it had settled a total 6 trillion yuan worth of export and import bills over the past four years, with the figure in the first half of this year alone surging 56 per cent from a year ago to 1.6 trillion yuan.

The survey also noted factors that could impede the smooth progress of yuan globalisation in the future, including a lack of a wide range of yuan-related investment instruments.

Beijing has been trying to increase the global clout of its currency by promoting foreign trade settlement in yuan and signing bilateral currency swaps with other countries. But some economists said it would take a long time for the yuan to become a global reserve currency.

China first launched the yuan trade settlement scheme in July 2009 in a few cities, and expanded it to 20 provinces a year later.

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