ABC Boosts RMB Internationalization

Recently, Agricultural Bank of China Limited (ABC) took an active part in RMB internationalization. It continuously improved and diversified cross-border RMB business systems in all fields (such as settlement, clearing, financing, trading, cash management and investment), boosting the development of RMB businesses. In 2015, accumulative cross-border RMB settlement was close to RMB2 trillion, including “Hong Kong Stock Connect” cross-border RMB fund settlement of RMB23.9 billion and two-way cross-border RMB cash pooling sweep of RMB13 billion for 116 transnationals. It also provided trust services for multiple overseas institutions concerning investment in the interbank bond market and RQFIIs.
To improve cross-border RMB business infrastructure, ABC has opened over 270 RMB clearing accounts for other banks in the world. It took the lead to launch the RMB deferred clearing services in Europe and Middle East, and actively participated in the CIPS development. It passed the business and technical acceptance organized by the People’s Bank of China with honors.  Last October, ABC was named among the first batch of banks to directly participate in CIPS. So far, 27 overseas banks across Asia, Europe, Africa, the Americas and Oceania have joined the CIPS as indirect participants via ABC.

ABC accelerated cross-border RMB business development in border areas and promoted the use of RMB in the regions along the “Belt and Road” such as Association of Southeast Asian Nations and Central Asia.  ABC built platforms for cross-border financial services. It continued to give full play to the role of ASEAN Cross-border RMB Business Center in Guangxi, and established Pan-Asia Business Center in Yunnan and Mongolia Cross-border RMB Business Center in Inner Mongolia to promote the exchange of RMB with other currencies (such as Vietnamese dong, Kyat, Lao kip, Thai Baht and Mongolian Tugrik). It is the first bank to launch the listing transaction between RMB and Tajikistani Somoni in China. It also innovated cross-border financial service modes, and supported agriculture to “go global” by granting RMB project loans to agriculture-related enterprises engaging in the construction of cotton bases in Tajikistani.
In an effort to develop offshore RMB investment/financing business, ABC not only issued and underwrote “Dim Sum Bond” and “Lion City Bond” in RMB, but also took the lead in issuing other RMB bonds, including “Formosa Bond” in Taiwan, “Rhein Bond” in Germany and “Emirates Bond” in UAE. Last October, ABC listed the first green bond of Chinese financial institutions on the London Stock Exchange, which was also the first green bond in RMB that was issued by Asian issuer.
To provide stronger support for free trade zones, ABC has made innovations in businesses and services in respect of cross-border RMB use, capital account convertibility, market-oriented operation of interest rate and foreign exchange management reform. Multiple products such as free trade accounting unit (FTU) for “cross-border RMB integrated financial services” were rated as “typical case of FTZ financial innovation”. It was among the first batch of banks to handle innovative cross-border RMB business in free trade zones of Guangdong, Tianjin, Fujian etc.