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How far will China go for yuan globalization?

by Xinhua writers Wang Yaguang, Chen Yongrong

BEIJING, March 13 (Xinhua) -- The world is watching China's next move after it witnessed last year key progress in the initiative to make renminbi, or yuan, a global currency.

As government officials hinted the establishment of a global board at the Shanghai A-share market during the annual "two sessions" of the country's supreme legislature and top political advisory body, analysts believed it would be a catalyst to help accelerate yuan's globalization.

While delivering the government work report to the National People's Congress, Premier Wen Jiabao said last week the country would expand the use of renminbi in cross-border trade settlement and develop overseas financial services using yuan.

Cao Honghui, a researcher at the Chinese Academy of Social Sciences (CASS), a government think tank, said the overseas financial services could include using yuan for account settlements, promoting renminbi-denominated credit cards, deposit services and insurance of yuan-denominated stocks and bonds. "A-share global board is just one of them," Cao said.

Geng Liang, governor of the Shanghai Stock Exchange, said rules have been drafted for the listing and trading of overseas companies on the international board at the bourse, but there is still no timetable for the launch of the board.

Shanghai Mayor Han Zheng, however, assured "the board would certainly be launched," as a document of the State Council last year said explicitly the country will allow overseas companies to list on domestic bourses at a proper time.