Translated with AI assistance
China intends to further open its financial market to foreign investors and expand the international use of the yuan. Pan Gongsheng, Governor of the People’s Bank of China, stated at the annual meetings of the IMF and the World Bank that Chinese assets can meet the growing demand of global investors for diversification. According to him, steady economic growth and the rapid development of high-tech industries provide additional support for yuan-denominated assets.
A few days later, at the Financial Street Forum in Beijing, the authorities presented a more specific package of measures. The People’s Bank of China plans to launch a pilot mechanism that will make it easier for foreign financial institutions to buy and sell yuan on the domestic foreign exchange market. At the same time, regulators intend to improve foreign investors’ access to securities through the Qualified Foreign Institutional Investor (QFII) system, which allows overseas institutional investors to operate in the Chinese market.
Beijing also plans to expand the use of yuan-denominated bonds as collateral in international markets, develop offshore yuan centers, and connect China’s financial infrastructure with foreign systems. The People’s Bank promises to expand currency and other financial risk management tools for international investors.
Certain changes will affect companies engaged in cross-border business. China’s State Administration of Foreign Exchange is preparing measures to simplify settlements for foreign trade, international investment and financing, as well as the transfer of funds between countries. In addition, China intends to expand a pilot program under which brokerage firms can conduct foreign currency purchase and sale transactions.
Thus, it is not only about attracting foreign capital to the exchanges. China is gradually building a broader infrastructure for the international circulation of the yuan – from bond and equity investments to currency operations, cross-border financing, and risk management.
This course is being held against the backdrop of more volatile global markets. Pan Gongsheng cited geopolitical risks, the restructuring of the global economy, and the rapid development of artificial intelligence among the factors transforming the world’s financial system.
