Both foreign central banks and financial institutions can invest in the bond market in mainland China, and China enecourages ASEAN countries to do so by providing more conveniences, said Yi Gang, the Deputy Governor of the People’s Bank of China(PBOC) and the Director of the State Administration of Foreign Exchange (SAFE).
In recent years PBOC has signed over 1.400 trillion yuan worth of bilateral local currency swap agreements with several ASEAN members. China has also signed bilateral settlement agreementwith Vietnam and Laos, authorizing the Singapore branch of the Industril and Commercial Bank of China (ICBC) to provide Renminbi settlement services. The amount of Renminbi settlement between China and ASEAN increased each year and totaled 1.12 trillion yuan from 2009 to late June in 2013. Renminbi now can be directly traded with Malaysian Ringgit and Tail Baht.
Yi said the China-ASEAN financial cooperation is an extremely promising undertaking built upon solid foundation. PBOC desires to deepen bilateral and regional cooperation and to promote sustainable growth of the regional economy on the basis of mutual benefit and win-win cooperation. He further raised four suggestions: the frontmost is the cooperation to ensure financial stability and improve the ablity to handle crisis. Emerging markets must work together to deal with the financial disturbance caused by the expectations for the developed economies to exit quantitative easing. Future crisis management frameworks may be based on the 10+2, EMEAP and other platforms. Next comes the monetary cooperation to provide convenience for trade and investment. PBOC hopes to further the currency cooperation with ASEAN members, encourage local currencies to be used in bilateral settlement, and promote the execution and delivery of bilateral currency swap agreements, thus creating convenience for trade and investment as well as providing liquidity support to the maket. The third is deeper cooperation in relation to financial markets by allowing free flow of financial elements, opening up the bond markets, and facilitating the integration of financial markets. The final one is continued efforts in financial infrastructure construction and promotion of intercommunication.