China extends yuan trade settlement to whole countryChina announced on Tuesday that all parts of the country are able to use its national currency, the yuan or Renminbi, in cross-border trade settlements.
Previously, only 20 provincial regions in the country could conduct cross-border trade settlements in yuan.
The policy was announced by the People's Bank of China, the country's central bank, and five other financial authorities.
The extension is a crucial step in boosting cross-border use of yuan, which is stated in the country's 12th Five-year Plan (2011-2015), and will better serve enterprises' needs and further facilitate trade and investment, the central bank said in a statement on its website.
The move came after an announcement made by Vice Premier Li Keqiang last week that the government would extend cross-border trade settlement in yuan to the whole country.
Analysts said encouraging the use of yuan in cross-border trade settlements indicates China's ambitions of pushing forward the internationalization of the yuan. That is a good move that will reduce the use of dollars and save the companies involved from being ripped off for exchange charges. Sound idea.