Chinese tax authorities are considering expanding the scope of business to include yuan loans from domestic banks abroad

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China’s central bank and the state foreign exchange administration jointly released draft guidelines on Saturday that expand the scope of business open to domestic banks’ foreign yuan loans.

It is another new step to show the country’s opening up to the banking sector and its ambition to advance the internationalization of the yuan.

The draft states that currently the size of yuan loans for foreign projects by domestic banks is relatively narrow, and loans are limited to companies related to foreign direct investment, foreign contract projects, and export credits.

The draft relaxes such restrictions, meaning that foreign lenders are no longer restricted to “outbound” projects.

On Saturday, China’s central bank released an annual report on the internationalization of the yuan, stating that the total amount of cross-border yuan receipts and payments in 2020 hit a record 28.39 trillion yuan (US $ 4.39 trillion) despite the pandemic. Dollar). compared to the previous year increased by 44.3 percent.

The report said that around 10.26 trillion yuan of financial products, including yuan stocks, bonds, loans and deposits, were held by foreigners as of the end of June, up 42.8 percent from the previous year.

Data from SWIFT showed that yuan payments accounted for 2.5 percent of all currency payments, up 0.7 percentage points from a year earlier.

Global times


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