(Adds details, background)
(Adds details, background)
HONG KONG, July 8 (Reuters) – China’s central bank will
allow companies and individuals in Tianjin Eco-City to conduct
cross-border yuan transactions with Singapore, following in the
footsteps of the Suzhou Industrial Park where a trial scheme was
approved last month.
The People’s Bank of China (PBOC) has released rules to
banks to kick off the Tianjin trial, which will allow equity
investment funds and individuals to make overseas investments in
yuan. It will also let companies in the area take up yuan loans
from banks in Singapore, three sources told Reuters on Tuesday.
One of the sources close to Chinese regulators said the
central bank would announce the trial scheme on Wednesday,
aiming to facilitate offshore yuan repatriation and enhance
Chinese companies’ competitive strength.
The Tianjin Eco-City, launched in 2007, is a joint project
of the Chinese and Singaporean governments that aims to develop
a template for environmentally friendly cities.
The initial quota for cross-border yuan lending between the
Tianjin Eco-City and Singapore this year is 2 billion yuan ($322
million), the source added.
“We have already started to cultivate Tianjin corporate
clients actively for cross-border lending and bond issuance
business,” said an official at a Chinese state-owned bank’s
Companies that will be permitted to conduct cross-border
yuan transactions with Singapore need to register in the
Eco-City, while banks involved include lenders in Singapore and
those set up by the Tianjin government.
An official from the Tianjin Eco-City confirmed it would
hold a news conference with the PBOC on innovative cross-border
yuan business on Wednesday.
The PBOC Tianjin branch could not be reached for comment.
The PBOC Nanjing branch announced last month it would let
eligible companies and individuals in the Suzhou Industrial Park
(SIP) conduct cross-border yuan transactions with Singapore.
Competition to become the next offshore yuan centre after
Hong Kong has intensified as China accelerates efforts to
promote its currency to regions beyond Asia.
It took almost 10 years for China to set up another yuan
clearing bank after Hong Kong, but such banks have sprung up in
the past year as Beijing has stepped up efforts to facilitate
yuan usage in trade settlement and investment.
Beijing assigned yuan clearing banks for London and
Frankfurt in June, followed by announcements it would set up
yuan payment systems in Luxembourg, Paris and South Korea.
Singapore was granted a yuan clearing bank in February 2013
and has an investment quota of 50 billion yuan to enter China’s
domestic capital market under the Renminbi Qualified Foreign
Institutional Investor (RQFII) scheme.
($1 = 6.2051 Chinese Yuan Renminbi)
(Reporting by Hongmei Zhao; Writing by Michelle Chen; Editing
by Alan Raybould)
UPDATE 1-China"s Tianjin Eco-City gets go-ahead for yuan deals with Singapore