Shanghai to lead ‘financial superpower’ push as China unveils plan to boost yuan use
China’s central bank governor speaks at annual financial forum about further opening repurchase facilities and offshore trading to foreign central banks
Top Chinese financial regulators have vowed to accelerate Shanghai’s transformation into a full-fledged global financial hub and encourage the yuan’s overseas adoption, as Beijing seeks to tout China’s stability amid volatility in the global market.
Speaking in Shanghai on Wednesday at an annual financial gathering known as the Lujiazui Forum, policymakers such as People’s Bank of China governor Pan Gongsheng also said that the city would continue to serve as a vital conduit for offshore finance and foreign participation in domestic markets.
As the two-day forum kicked off, the head of the central bank used his keynote speech to outline an updated action plan for Shanghai’s offshore finance and the yuan business.
“We will conduct a pilot programme for offshore-yuan foreign-exchange trading in Shanghai to promote a two-way opening of the market and help Shanghai become a global yuan-asset-allocation and risk-management centre,” Pan said.
He added that the PBOC would establish repurchase facilities for overseas central banks and monetary authorities to use high-grade assets, such as Chinese government bonds, for repurchase agreements. The move is meant to facilitate yuan-liquidity management and asset allocation.
Six lenders – Industrial and Commercial Bank of China; Agricultural Bank of China; Bank of China; China Construction Bank; Bank of Communications; and Citic Bank – will be authorised to conduct offshore-yuan foreign-exchange trading in the Shanghai Free Trade Zone using the China Foreign Exchange Trade System, he said.