Domestic and international companies in China have raised doubts on whether banks can provide facilitated yuan settlement services to improve liquidity in the companies, reduce forex risk and increase investment return as well as efficiency in capital management, reports the China Daily.
The booming cross-border trade between Greater China and other Asian nations have strengthened the need for yuan settlement services, says the Daily.
Citing a recent poll conducted by HSBC Holdings Plc, the Daily says that 69% of companies surveyed said they want lenders to offer advanced cross-border settlement services in the mainland, Hong Kong and Taiwan. The study also found that 57% prefer banks to have branches in the mainland, Hong Kong and Taiwan; while 49% desire "one-stop" financial services from opening an account to settling fund transfers for cross-border settlement.
Xu Sheng, director at the Capital Management Department of JPMorgan Chase & Co., told the Daily that expanding financial services does not only depend on domestic companies."Overseas companies need to be persuaded to use yuan as the settlement currency," says Xu.
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