Unnamed American Bank to Invest in 250 Billion Chinese Renminbi

Economics2 Comments

By JC Collins

One of the biggest financial news stories which has gone unmentioned over the last week is the official remarks released by Chinese Vice Premier Wang Yang at the end of the Eighth Economic Track of the US-China Strategic and Economic Dialogue, which stated the following:

The two countries have made major progress in financial cooperation.  The two sides will strengthen cooperation in renminbi (RMB) currency trading and clearing in the U.S.  China agreed to extend a 250 billion RMB Qualified Foreign Institutional Investor (RQFII) quota to the U.S., and designate one qualified bank from China and another from the U.S. as RMB clearing banks.  Both sides welcome the ongoing cooperation among trading platforms, so as to enhance connection of their financial markets and products.

More can be read about this conference and the alignment between the US and China in the post Newstainment and Diametric Complexity – A Gap Analysis on South China Sea Tension and Global Governance Alignment.

2 Comments on “Unnamed American Bank to Invest in 250 Billion Chinese Renminbi”

  1. Some interesting information with regards to RMB currency trading and clearing in the U.S.:
    Michael R. Bloomberg to Chair Newly Formed Working Group on U.S. RMB Trading and Clearing
    November 30, 2015
    In addition to the aforementioned leadership, The Working Group on U.S. RMB Trading and Clearing will initially include the following member institutions:
    The U.S. Chamber of Commerce
    Bank of America
    BNY Mellon
    Citi
    Goldman Sachs
    JP Morgan Chase
    Morgan Stanley
    Wells Fargo
    Agricultural Bank of China
    Bank of China
    Bank of Communications
    China Construction Bank
    Industrial and Commercial Bank of China

    The The Working Group website and recent press release:
    The Working Group on U.S. RMB Trading and Clearing Applauds S&ED Action, Publicly Releases Roadmap for Action
    June 7, 2016
    Recommendations of Working Group and S&ED Actions Include the Establishment of Clearing Banks or Clearinghouses in the United States, RQFII Allocation, and Improved Access to China’s Bond Market.

    The Working Groups publicly released RoadMap for Action

  2. Nice research Alan. Seems the Treasury is on board also.

    "The United States and China welcome efforts to further develop Renminbi (RMB) currency trading and clearing capacity in the United States, consistent with applicable laws, and to improve access by U.S. institutional investors to Chinese capital markets while deepening China’s financial markets. Both sides stress the importance of maintaining a level playing field between Chinese and foreign financial institutions in RMB trading and clearing services.

    - China commits to designate RMB clearing banks in the United States as an additional mechanism to clear RMB alongside correspondent bank relationships.

    - The United States welcomes China’s initial extension of a 250 billion RMB Qualified Foreign Institutional Investor (RQFII) quota to the United States, and looks forward to U.S. institutions receiving licenses before the end of 2016. China is to increase the U.S. RQFII quota according to market development and demand.

    - The U.S. Department of the Treasury and the People’s Bank of China are to jointly assess, no less than annually, RMB trading and clearing mechanisms in the United States."

    https://www.treasury.gov/press-center/press-releases/Pages/jl0484.aspx

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