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Friday, March 13, 2015, 18:00

A financial spearhead in cross-border business

By Yang ziman and Liu wenwen

The Greater Mekong Subregion, particularly Vietnam, Laos and Myanmar, is an ideal place to promote the use of renminbi, said Hu, as the currency has an increasing profile in trade and investment in the area.

Renminbi reserves in the five countries in the subregion are now estimated at 300 to 400 billion yuan ($48 to $64 billion), according to Hu’s research.

“The outflow of renminbi is realized through its more extensive use in the pricing and settlement in the economic exchange between China and those countries in foreign direct investment, securities investment and international loans and credit,” said Hu. “Back-flow of the currency is done mainly through the purchase of Chinese commodities and services by neighboring countries.”

Another challenge is the underdeveloped financial sector in those countries.

In Vietnam and Cambodia, banks still use handwritten documents in their daily work. Little is known about using the Internet and information technology to do more sophisticated business with Chinese banks.

“Efforts have to be made to elevate these banks’ service capacity before deepening collaboration with them,” said Luo.

CCB’s Yunnan branch was the first to set up cross-border Internet banking service with Vietnam in 2008. It has now helped establish cross-border Internet banking services at several banks in Lao Cai, a province of Vietnam close to Yunnan.

The branch is going to expand the renminbi settlement services to more cities along the border with foreign banks using existing partnerships. Meanwhile, it is trying to talk with banks in Laos and Cambodia to improve the renminbi settlement network.

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