Regulations on RMB trade settlement pilot scheme

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China's financial authorities have unveiled regulations that will guide the pilot scheme for cross-border trade to be settled in the Renminbi currency.

China's financial authorities have unveiled regulations that will  guide the pilot scheme for cross-border trade to be settled in the  Renminbi currency.

Back in April, the central government selected five cities to be the first trial areas on the mainland. The financial hub of Shanghai is on the list, along with four cities in the southern province of Guangdong. Meanwhile, the trial areas outside the mainland are the Special Administrative Regions of Hong Kong and Macao, as well as ASEAN countries.

According to the regulations, export companies that use the RMB to settle trade transactions will be able to enjoy tax rebates or an even tax exemption. Export companies will also be able to deposit RMB revenues gained from exports in banks outside the mainland. China's central bank says there is no particular threshold for pilot companies. But they should have good credit and assets.

Su Ning, Deputy governor of People's Bank of China, said, "The basic idea of the pilot scheme is to provide convenience for settlement in RMB. And also to erase restrictions we originally employed to limit the use of the RMB in cross-border trade. So it will enable us to follow internationally common practices and conduct cross-border trade settlements in RMB."