THE MARKETS Yuan Use Expansion

THE MARKETS Yuan Use Expansion

The Peoples Bank of China （PBC） announced on February 19 that China would continue to expand the cross-border use of the yuan this year.

The central bank will gradually upgrade the yuan formation mechanism and expand the exchange rates floating range in an orderly way.

The statement came after Shanghai free trade zone （FTZ） announced on February 18 that five third-party payment firms have been approved to handle yuan-denominated crossborder payments in the zone.

The Shanghai Office of the PBC said that Allinpay， 99Bill， ChinaPay， Dongfang Electronics and Shengpay are now allowed to process cross-border payments in the renminbi in the FTZ.

The Bank of China cross-border renminbi index hit a record high of 228 in the fourth quarter of 2013.

The yuans cross-border settlement was 3.64 trillion yuan （$597 billion） in the first 11 months of 2013， 350 times that in 2009， the PBC said at a work-planning meeting in January.

Private Capital

Oil refiner Sinopec announced on February 19 that it would bring in social and private capital to market and sell its oil products， the first opening up of the largely monopolized sector.

The Sinopec website said that the board of directors had approved a decision on mixedownership operations.

Sinopec will restructure its sales business after evaluation of current assets and debt， and the stake of private capital will hinge on market conditions.

The move made Sinopec the first of the three big state oil companies， including PetroChina and CNOOC， to bring in private capital into the sales business since the Third Plenary Session of the 18th Communist Party of China Central Committee decided in November that more state-owned enterprises should develop mixed ownership. n

February 27， 2014 BEIJING REVIEW 39endprint