12 corporate treasurer December 2015 / January 2016
2003 Jul 2007
accounts for individuals
allowed in Hong Kong
First dim sum bond
issued by China
Jul 2009 Sep 2010 Jan 2011 Oct 2011
Offshore banks given
access to China’s onshore
The first foreign-issued
dim sum bond by a
allowed for FDI in
The IMF has endorsed the
renminbi as a freely usable
importance in the global
financial market. The
renminbi’s journey to
attaining this status was
Ann Shi reports
The RMB international journey before 2015
*Sources: central banks, HSBC, ANZ, The Corporate Treasurer
thecorporatetreasurer.com December 2015 / January 2016 corporate treasurer 13
China’s grand plan is to secure the
renminbi’s status as a global reserve
currency and all the hard work has paid
off. On November 30, the IMF pledged to
include it in the special drawing rights
(SDR) basket, as good as confirming it as a
foreign exchange reserve asset.
While the SDR inclusion might not
directly affect corporate treasurers
(although many predict there will be
increased currency volatility), the effort
to get here has clearly made using the
renminbi a lot easier.
However, the pace of regulatory change
has left many desperately trying to keep
up. For example, in February, China
allowed the Shanghai free-trade zone to
offer unfettered access to raising renminbi
funds offshore; in August, the People’s
Bank of China (PBoC) changed how the
renminbi’s reference rate is calculated;
and in September, the central bank raised
the ceiling on cross-border renminbi fund
flows for multinationals via two-way cross-
border renminbi cash pooling.
In a bid to help you chart the renminbi’s
internationalisation more easily, The
Corporate Treasurer has selected the
decisive policy changes China made in
2015 that are shaping the international
future of the world’s fourth most-used
s a world payments currency,
the renminbi ranks fourth in
value behind the US dollar, the
euro and the British pound,
according to Swift.
Its rapid rise is a product of the vast
levels of trade the country conducts
globally, combined with an extensive and
strategic opening up of the current and
Through initiatives such as the qualified
foreign institutional investors (QFII)
and renminbi QFII schemes and their
domestic equivalents, the opening of the
China interbank bond market, and Hong
Kong-Shanghai stock connect, the country
widened the channels to draw domestic
and foreign capital to the renminbi.
PBoC bilateral currency
swap arrangement with
RBA worth Rmb200
Jun 2012 Dec 2012 Apr 2013 Jun 2013 Oct 2013 Mar 2014 Oct 2014 Nov 2014 Dec 2014
PBoC currency swap
arrangement with BoE
of Rmb200 billion
PBoC currency swap
arrangement with ECB
of Rmb350 billion
band widened to
2% from 1%
thecorporatetreasurer.com14 corporate treasurer December 2015 / January 2016
[Apr 14] Qatar opens the Middle East’s first centre for
clearing transactions in renminbi.
[Jul 23] A branch of the National Bank of Kenya becomes the first
clearing house to allow the settlement of renminbi trade deals in the
[Jul 8] China’s central bank authorises the Bank of China’s
Johannesburg branch to serve as the clearing bank for renminbi
businesses in South Africa. In April, the PBoC also signed a bilateral
currency swap agreement worth Rmb30 billion with the South
African Reserve Bank.
[Oct 20] The PBoC and the Bank of England extend their currency
swap agreement from Rmb200 billion to Rmb350 billion for three
years. China also announces it will establish a renminbi “asset
trading centre” in London.
On the map: RMB footprints in 2015
[Apr 14] Prime Minister Najib Razak says
the country will become a major offshore
renminbi clearing centre.
[Apr 8] Australia and China sign a Rmb200
billion currency swap deal for three years,
extending a previous arrangement that
expired on March 22.
[Dec 11] The PBoC approves renminbi capital account
convertibility within a prescribed limit of $10 million for
companies registered in the Tianjin, Guangdong, and Fujian
free-trade zones (FTZs).
[Oct 8] The PBoC launches the China International Payment
System (Cips), with 19 participant banks. Cips is the nation’s
new clearing network for international renminbi payments that
originate from or end in China.
[Oct 30] The PBoC makes Shanghai’s FTZ the first region to fully
liberalise the capital account.
[Est. 2016] Following the link between Shanghai and Hong Kong
in 2014, the latter is set to launch Hong Kong-Shenzhen Stock
Connect. Originally mooted for 2015, technical issues have
been blamed for the 2016 expected deadline. The government
intervention of summer 2015 may have also played a role.
[Oct 26] Taiwan’s central bank expands renminbi usage by
allowing companies to buy forwards and swaps via their
banks to pay for services and goods, and for trade or direct
[Jun 24] Bank of Tokyo-Mitsubishi UFJ issues Japan’s first
renminbi-denominated bonds, raising Rmb350 million, marking
the country as another source of offshore renminbi funding.
[Oct 31] China and South Korea agree to trade Korean won and
renminbi directly via the China Foreign Exchange Trade System.
The scheme has yet to launch.
[Nov 9] Cross-border renminbi initiatives between Singapore
and China now include Suzhou, Tianjin and Chongqing.
Singapore-based banks can lend renminbi to companies in
those cities, and companies based there can issue renminbi
bonds in Singapore and repatriate the proceeds.
[Jan 6] Renminbi clearing settlements become available in
Thailand with ICBC (Thai) appointed as the clearing bank by the
thecorporatetreasurer.com December 2015 / January 2016 corporate treasurer 15
[Oct 29] Deutsche Börse and the PBoC’s agree on a joint venture to
develop renminbi-denominated currency and interest-rate trading in
Europe – the first authorised platform dedicated to renminbi trading
outside mainland China. Chinese companies may be allowed to list
renminbi-denominated stocks in Frankfurt next year, also.
[Nov 10] The renminbi and Swiss franc can now be directly traded
with each other in the inter-bank foreign exchange market. China
Construction Bank is the authorised renminbi clearing bank.
[Apr 7] The National Bank of Hungary says it intends to build a
Chinese bond portfolio. In June, Hungary also sets up a renminbi
[Mar 23] Toronto becomes the first renminbi trading hub in
North America with permission to be a clearing house for the
[Nov 30] The IMF includes renminbi in its special drawing rights
currency basket, with the transition set for October, 2016. At
least $1 trillion of global reserves are estimated to switch to
[May 25] During Chinese Premier Li Keqiang’s visit, Chile and
China agree on a currency swap, a quota of Rmb50 billion for
Chile’s QFIIs, and the appointment of China Construction Bank as
the first renminbi clearing bank in Latin America.