RMB settlement to grow in China - ASEAN trade

05 Jan '10

1 min read

Experts aver that the internationalization of a currency is generally divided into three stages. First, the currency is in cash flow and used in surrounding areas; second, the currency is denominated in trade and financial transaction, settlement and circulation in surrounding areas, what is called as currency internationalization.

Third, the currency becomes reserve currency and achieves true internationalization. At present, the Renminbi (RMB) has taken a head start in the ASEAN region in acceptance, distribution, and payment convenience.

At present, trade volume between China and the ASEAN regions is quite large, bilateral trade volume reached US $231.12 billion in 2008. In spite of being hit by the economic crisis in 2009, trade volume between China and ASEAN countries reached $187.05 billion in the first 11 months of 2009.

This region will become the world's fastest-growing region in terms of population size and growth potential in the future and demand of Yuan-denominated settlement is expected to grow with the growth in trade between China and ASEAN countries since the Free Trade Agreement came in to effect from January 1, 2010.

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