China needs to start its cross-border payment system soon as the nation pushes for the yuan to be added to the International Monetary Fund’s basket of four reserve currencies, a survey by Allen & Overy LLP shows.
The London-based law firm, which interviewed 150 companies in the U.S., Europe and Asia-Pacific regions in January and February, said 74 percent of those surveyed cited a delay in the start of the China International Payments System, or CIPS, as the major obstacle to their use of cross-border yuan transactions.
A centralized payment system serves to ease technical issues such as language, bolstering usage that could make the yuan “freely usable,” a key requirement under the IMF’s twice-a-decade review of its reserve-currency basket.
“Companies now see China as a regional play rather than an isolated island,” Jane Jiang, Allen & Overy’s China regulatory partner in Beijing, said in an April 17 phone interview. The CIPS will offer a global platform for yuan transactions, she said.
An annual survey by HSBC Holdings Plc last month suggested the yuan’s rise in global trade is losing momentum.
China will start the international payment system later this year, allowing 24-hour settlement, Chen Xingdong, the Beijing-based chief China economist at BNP Paribas SA, said in a March 18 phone interview.
The Washington-based IMF will conduct a review of the Special Drawing Rights in October after an informal briefing in May, Managing Director Christine Lagarde said in a December report.
Asia’s largest economy is making the yuan more convertible under the capital account and hopes it can be part of the IMF’s basket of reserve currencies that includes the dollar, euro, pound and yen, People’s Bank of China Governor Zhou Xiaochuan told Lagarde at a forum in Beijing last month.
Missing Deadlines
The CIPS start has missed key deadlines and will be pushed back until 2016, Allen & Overy wrote in the survey report published Monday.
A third of the respondents in the survey said they are conducting cross-border pooling in Shanghai’s free-trade zone, which allows companies to transfer yuan holdings in and out of the nation, without needing the approval of the foreign-exchange regulator.
Some 53 percent said they were considering setting up such a pooling structure. Sixty-four percent of those polled said they may consider relocating regional treasury centers to China with further exchange-rate liberalization.
bloomberg.com
The London-based law firm, which interviewed 150 companies in the U.S., Europe and Asia-Pacific regions in January and February, said 74 percent of those surveyed cited a delay in the start of the China International Payments System, or CIPS, as the major obstacle to their use of cross-border yuan transactions.
A centralized payment system serves to ease technical issues such as language, bolstering usage that could make the yuan “freely usable,” a key requirement under the IMF’s twice-a-decade review of its reserve-currency basket.
“Companies now see China as a regional play rather than an isolated island,” Jane Jiang, Allen & Overy’s China regulatory partner in Beijing, said in an April 17 phone interview. The CIPS will offer a global platform for yuan transactions, she said.
An annual survey by HSBC Holdings Plc last month suggested the yuan’s rise in global trade is losing momentum.
China will start the international payment system later this year, allowing 24-hour settlement, Chen Xingdong, the Beijing-based chief China economist at BNP Paribas SA, said in a March 18 phone interview.
The Washington-based IMF will conduct a review of the Special Drawing Rights in October after an informal briefing in May, Managing Director Christine Lagarde said in a December report.
Asia’s largest economy is making the yuan more convertible under the capital account and hopes it can be part of the IMF’s basket of reserve currencies that includes the dollar, euro, pound and yen, People’s Bank of China Governor Zhou Xiaochuan told Lagarde at a forum in Beijing last month.
Missing Deadlines
The CIPS start has missed key deadlines and will be pushed back until 2016, Allen & Overy wrote in the survey report published Monday.
A third of the respondents in the survey said they are conducting cross-border pooling in Shanghai’s free-trade zone, which allows companies to transfer yuan holdings in and out of the nation, without needing the approval of the foreign-exchange regulator.
Some 53 percent said they were considering setting up such a pooling structure. Sixty-four percent of those polled said they may consider relocating regional treasury centers to China with further exchange-rate liberalization.
bloomberg.com
No comments:
Post a Comment