The “Measures for the Administration of Cross-border Trade RMB Settlement Pilots†jointly drafted by the People's Bank of China, the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation and the China Banking Regulatory Commission were officially announced yesterday and will be implemented from July 1.
The promulgation of the "Measures" means that the cross-border trade settlement of the renminbi has entered the countdown stage, which also marks a major step forward in the internationalization of the renminbi.
Main contents of the "Measures"
Pilot geographical area:
The four cities of Guangzhou, Shenzhen, Zhuhai and Dongguan in Shanghai and Guangdong Province took the lead in pilot work.
The geographical scope of overseas pilot projects is tentatively set for Hong Kong and Macao and ASEAN countries.
Which companies can participate in the pilot?
The provincial people's government of the pilot area shall be responsible for coordinating relevant local departments, recommending pilot enterprises for cross-border trade settlement of RMB, and then the People's Bank of China shall review with the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation, the China Banking Regulatory Commission and other relevant departments to select The international settlement business has rich experience and complies with the regulations on finance, taxation, commerce, customs and foreign exchange management. Enterprises with good credit standing participate in the pilot program.
What are the conditions for domestic commercial banks to provide cross-border trade RMB settlement services?
Domestic commercial banks with international settlement capacity, opening accounts for pilot enterprises or opening inter-bank business accounts for overseas commercial banks can provide cross-border trade RMB settlement services for pilot enterprises.
Release history
Last year, Shanghai and Guangdong Province successively proposed to the State Council that they hope to launch a pilot program for cross-border trade settlement in RMB.
On April 8 this year, the State Council decided to launch pilot projects for cross-border trade in RMB settlement in Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan.
On July 2, the “Measures for the Administration of Cross-border Trade RMB Settlement Pilot†was issued.
progress
The first RMB trade settlement occurred in July
The industry believes that the promotion of RMB settlement is obviously aimed at maintaining stable growth of foreign trade, but the initial scale is small and should be of the nature of “testing waterâ€.
The reporter learned that Guangdong has selected 300 companies to participate in the pilot cross-border settlement of RMB. These enterprises cover various fields such as trade, production and sales, of which about 100 are in Guangzhou, and about 100 pilot enterprises in Shenzhen, including Hong Kong businessmen.
In addition, most of the 100 pilot enterprises listed in Shanghai that have been included in the cross-border trade settlement of RMB have already reserved RMB settlement business, and have made relevant project arrangements and funding.
Three days ago, the central bank had just reached an agreement with the Hong Kong Monetary Authority to agree to supervise and cooperate with the Hong Kong banks in handling the RMB trade settlement business within their respective areas of responsibility. This means that Hong Kong is expected to be the first stop for RMB cross-border trade settlement.
“We look forward to the first RMB trade settlement in July,†said Yu Wei, chief representative of SWA Bank Shanghai.
influences
Corporate exchange risk and cost are greatly reduced
Bank experts said in an interview yesterday that the implementation of the measures has greatly facilitated the settlement of import and export trade of related enterprises, especially those that trade with ASEAN countries. In the past, the use of third-country currency transactions requires currency transactions. Interest rate risk, the means of avoiding exchange rate risk often leads to an increase in financial costs.
Pilot implementation can reduce the cost of enterprises, and it is certainly beneficial for enterprises that have a large correlation with the trade business of neighboring countries.
Ling Fangcai, chairman of Guangdong Textiles Import & Export Co., Ltd. said: "As a trading company, we certainly want to settle in RMB, because no matter which country we do business with, we will exchange foreign exchange for RMB."
However, as more companies can use the renminbi as a means of external payment, the income from bank settlement and sales of foreign exchange will also be affected in the short term. However, in general, due to the acceleration of the internationalization of the RMB, it has a positive impact on the Chinese economy. Therefore, local negative factors will also be offset.
focus
Enterprises can enjoy export tax rebates
According to the previous regulations, only exporters who receive foreign currency payments are entitled to VAT refunds. If trade settlement is in RMB, it means that the exporter cannot enjoy the VAT refund.
The "Measures for the Administration of Cross-border Trade RMB Settlement Pilots" clearly states that export trades that use RMB settlement will enjoy the tax rebate (exemption) policy for export goods in accordance with relevant regulations. Pilot enterprises are not required to provide foreign exchange verification forms when handling cross-border trade declarations and export goods refund (exemption) taxes settled in RMB.
No direct contact with hot money
After the implementation of the cross-border trade renminbi settlement pilot, the outside world often focuses on whether this will promote the influx of hot money. Although bank respondents generally believe that the pilot is not directly related to the influx of hot money, and the relevant departments have also passed the series of management regulations to increase the verification of the authenticity of foreign trade, "but whether the similar risks will be expanded after the pilot, it is not allowed at present. And we know. We are still crossing the river by feeling the stones. What we know is that in the process of RMB internationalization, there is still no timetable for free exchange under capital."
difficulty
There are still thresholds for RMB settlement
Yu Wei, the chief representative of Swiss AIA Bank Shanghai, pointed out three major challenges: First, the current source of overseas RMB is mainly the RMB funds exchanged with China and the RMB funds obtained through export. There are many limitations. Second, foreign importers and exporters The balance of RMB funds will be generated. In the short term, the overseas branches of Chinese banks should absorb the RMB deposits of the country. The long-term domestic financial market should gradually open to the return of overseas RMB funds. Third, the RMB settlement will inevitably affect China’s financial management. Capabilities, financial talent pools and the competitiveness of banks' internationalization pose challenges.
In addition, cross-border trade renminbi settlement depends on the acceptance of trading partners. He Bo, executive director of Hong Kong-owned Enterprise Chuangke Industrial Co., Ltd., told reporters that the company's customers are mainly in Europe and the United States, and it is still difficult to settle the RMB.
Accelerating the internationalization of the RMB
Bankers stressed that the acceleration of the internationalization of the renminbi is theoretically bound to put pressure on the medium and long-term strength of international payment currencies such as the US dollar and the euro. However, since the current cross-border trade settlement of RMB is limited to a small scale, especially China The difference in the types of goods traded with ASEAN countries, European and American countries is inherently obvious, so the short-term pilot will not have much impact on major currency trends.
Bond market fluctuations tend to increase
What deserves the attention of the banking industry is that, according to the pilot scheme, the Hong Kong and Macao renminbi clearing bank can also exchange RMB and borrowing funds from the domestic inter-bank foreign exchange market and the inter-bank interbank borrowing market in accordance with the relevant regulations of the People's Bank of China.
A PBOC spokesperson said yesterday that the domestic settlement bank can gradually provide RMB trade financing services in accordance with relevant regulations in order to facilitate the acquisition of RMB trade financing when foreign companies have a shortage of RMB funds. Bankers believe that with the advancement of the measures, China's interest rate market, especially the bond market, is also subject to more volatility factors.
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