RMB cross-border payment systems: Chinese foreign trade enterprises benefit most large banks

Updated: October 20, 2015  Views: 53

Sydney street on October 8 has a pack of mid-spring weather, mostly out of the CBD pedestrian unloaded in an open scarf wrapped skirts, marching sparse falling lazy gait, located on the corner of George Street, Sydney Branch of Bank of China also like spread to other financial institutions as close to routine day.

The same day a counter remitted by its 37 million yuan of business models, which is causing concern in the northern hemisphere renminbi cross-border payment system (CIPS) of the first show: the past must be cleared by the other banks 'bridge' of the yuan, the first a direct access to the country.

According to the central bank [microblogging] Introduction, CIPS is to provide funding for domestic and foreign financial institutions, cross-border and offshore renminbi business clearing and settlement services, it is an important financial infrastructure. Between the newly established cross-border payment and settlement bank (Shanghai) Co., Ltd. The company, in charge of independent operations CIPS system, and accept the central bank supervision and management.

Bankers have got involved in the first CIPS qualification told << China Economic Weekly >> reporter, and the past, 'Quxianjiuguo' and correspondent clearing bank mode model compared to, CIPS RMB clearing most prominent advantage is to extend the business time window and optimize the packet format, the efficiency of cross-border payment of RMB has been greatly improved.

In contrast, the reporter also noted that because the CIPS line soon, as the direct beneficiaries of the impact of foreign trade sector has to be apparent. And in the eyes of macroeconomists, after three years of careful preparation, which is a major internationalization of the RMB Cross Step.

Review: Three years to overcome the complex technical preparations

Reporters combed found, from the planned 2012 launch of the CIPS system formally launched today, in fact, I experienced a long three years. 'Fetal movement.' 'It's a complex system, is not able to complete overnight, involving many complex such as Many technical problems, communication, system risk control, etc., in addition to have the majority of the members to participate, so this system is actually already in the planning, but now on-line use. 'International Finance Director of the Shanghai University of Finance and Economics, Shanghai members of the Bank experts Xi Jun Yang on << China Economic Weekly >> reporter explained.

The central bank clearing house, a senior official told << China Economic Weekly >> reporter, back in 2009, began to discuss the possibilities, to 2011 in contrast to the relative details of two building programs, the finalized construction CIPS system independent, 'It was another cross-border payments are considering joining an existing business function modules in large-value payment systems, despite the relatively low cost of such a development, without adding too much system access equipment, but it will run the risk of adding to the system, and does not RMB payment in line with future potential huge market positioning, whether it was out. '

Fudan [microblogging] University of World Economy Institute deputy director Professor Sun Lijian [microblogging] is also an interview with reporters, he said the system needs a long-term run-perfect line: 'This settlement system perfect, not only can improve the business carried out , but also it involves a lot of design perfect situation, its possibilities impact of stress tests and other emergency response capacity, as well as aspects of our regulatory system. '

'China's development CIPS there are still some deficiencies, such as legal documents related to payment systems lower order bits, institutional provisions on payment systems belong to the hierarchy of normative documents, applicable law uncertainty, central bank management intent normative documents can not be implementation, and did not establish dispute settlement mechanisms to institutionalize cross-border payment and settlement of the like. 'The central bankers admitted to reporters.

However, in order to catch up with the RMB settlement and burgeoning demand, the central bank or accelerated CIPS system construction data show that in July 2009, cross-border trade RMB pilot from Shanghai and four cities in Guangdong province started. After a few years, RMB internationalization use and rapid development, to 2014, the proportion of RMB cross-border payments and foreign currency cross-border payments of up to 23.6%, while international cooperation RMB remarkable, as of the end of May 2015, the Central Bank and 32 national and central banks or monetary authorities of the region have signed bilateral currency swap agreements, the agreement total size of about 3.1 trillion yuan. the renminbi has become China's second largest cross-border payments and the world's fourth largest monetary payment currency.

'On the other hand, now is a good time to launch a node, because the current approach of the yuan of hot money began to gradually release the pressure, coupled with China also hopes to assume ownership of international currency, the SDR effort.' Sun Lijian supplementary case .

Contrast: greatly enhance settlement efficiency

CIPS before the on-line cross-border RMB clearing process seem tortuous, efficiency blocked. Xu Sheng Standard Chartered Bank [microblogging], general manager of cash management and trade finance Director of China to accept the analysis of << China Economic Weekly >> Reporter interview, the previous RMB clearing mainly through the clearing bank and correspondent bank model, under the 'clearing bank model, Hong Kong and Macao clearing bank direct access to large-value payment system, other clearing bank through its head office or parent bank access to large-value payment system, with all large-value payment clearing bank system as the basis to complete the cross-border and offshore renminbi clearing service, under the agency model, the territory of correspondent banks direct access to large-value payment system, overseas participating banks may open correspondent in the territory of the RMB interbank RMB cross-border transactions and accounts from shore funds liquidation. '

'In the past both the clearing bank or a large domestic banks, are direct access CNAPS (RMB large clearing system), while CNAPS originally designed in RMB clearing services, so CNAPS liquidation windows are GMT 9:00 to 5:00 point, so for outside mainland China, especially those in Asia outside when the bank or the customer, the RMB cross-border clearing is not particularly convenient. 'Xu Sheng explained.

It is reported that, CIPS will liquidate window extended from Beijing time 9:00 to 20:00, the time the operator has covered Asia, Europe, Africa, Oceania and other RMB business major time zone.

Xi Jun Yang is to reporters, in addition to the time zone problem, use the clearing bank mode corresponds to join clearing organizations, such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT), but by the clearing agency to pay for the existence of inconvenience, the lack of independent choice right now RMB clearing The large volume of business, and you need to customize some of the clearing agency.

'If through overseas clearing system, our independence on the poor, will be subject to restrictions on its system, including the working day rest day, and payment requirements it sets, etc., we have no choice independent authority, now CIPS systems into the central bank's management range, so that the regulation can prevent the emergence of illegal money-laundering, in accordance with our regulatory requirements to implement. 'Xi Jun Yang told reporters.

He also explained to reporters, using the agency model there are also inadequate, because it is looking for other banks outside the banks themselves have signed settlement functions, the development of bilateral, one model, 'but you and a bank in New York such as cooperation, customers In London, you can not handle by correspondent banks, so the agency can only be a small-scale, partial liquidation to pay. '

According to the central bank website, in addition to the time zone coverage and other characteristics of the above-mentioned outside, CIPS (a) not only to shorten the liquidation path, also using internationally accepted ISO20022 message standards, the adoption of a unified and standard Chinese Corner Code, transport support in English, in the name of , address, fees and other field is set on more favorable RMB business handled automatically.

Xu Sheng told << China Economic Weekly >> reporters in the past CNAPS (RMB large clearing system) does not directly accept these international standard format, from this point of view, as the agent bank, you do not need to go after these messages manually Translation, reducing the risk of manual entry, and improve the efficiency of liquidation.

Jian Sun also told reporters analyzed, compared to the previous RMB cross-border payment mode, CIPS system nodes take the form of centralized clearing business, which is a few strokes into the settlement money and the money together, does not require a large amount of foreign exchange retained as a clearing center foreign exchange risk is greatly reduced.

'Our big enterprises, especially large enterprises in the bank we want to go out of China, we can use this center directly for large liquidation liquidation, which enterprises to go out is very favorable. Previously no such business because previous large foreign exchange settlement will increase the risk of the bank, with the Clearing House, the risk is greatly reduced, so the bank has the ability to do large clearing business. 'Sun Lijian said.

p50 October 8, People's Bank of China [microblogging] CIPS Vice President Fan Yifei on a launching ceremony of the line said, CIPS system up and running will help improve the RMB cross-border settlement efficiency and promote use of the renminbi in the world, For better support real economic development and 'going out' strategy, it will have a profound impact.

October 8, People's Bank of China [microblogging] CIPS Vice President Fan Yifei on a launching ceremony of the line said, CIPS system up and running will help improve the RMB cross-border settlement efficiency and promote use of the renminbi in the world, for better support real economic development and 'going out' strategy, will have a profound impact.

Insight: large domestic banks and foreign trade enterprises benefit most

According to the central bank website, CIPS first directly involved agencies, including Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Bank of Communications, China Merchants Bank, Shanghai Pudong Development Bank, China Minsheng Bank, Industrial Bank, Ping An Bank, Huaxia Bank, HSBC Bank (China ), Citibank (China), Standard Chartered Bank (China), DBS Bank (China), Deutsche Bank (China), BNP Paribas (China), Australia and New Zealand Bank (China) and the Bank of East Asia (China) 19 Domestic and foreign banks.

This 19 participants is based on willingness to participate in the People's Bank of commercial banks, combined with domestic banks and offshore renminbi cross-border traffic, technology development capability and the geographical distribution of foreign banks to the country and so on, through technical inspection Manpower determined.

In addition, on-line synchronization indirect participants also comprises 38 domestic banks in Asia, Europe, Oceania, Africa and other regions and 138 foreign banks.

Xi Jun sheep in the opinion, is undoubtedly the biggest winner domestic Dahon CIPS system: 'CIPS system is most advantageous for accusing him of domestic, one is saving the original cost, the original correspondent model will generate a lot of costs, on the other hand, the bank's increase the volume of business, we are more willing to use it to pay complete, forming a virtuous circle. '

In addition, he also believes, CIPS for outside use to hold the renminbi, especially offshore renminbi assets of participants, organizers, agencies also very advantageous, 'because their RMB transactions, scheduling funding channels more smoothly, that is, that they themselves are a 'sub-reservoir', and now the pipeline is directly connected to our 'pool', capital inflow and outflow is very convenient. '

Shanghai University of Finance and Zhao Lei, deputy director of the Institute of Finance and Economics, told reporters supplement, as RMB clearing payment system, does not support the liquidation payment in foreign currency, if the RMB as the settlement currency directly CIPS system that is certainly very convenient, 'and in addition to the territory basically there is no difference other than loss of RMB and offshore renminbi interest rates, but also to avoid the exchange rate losses between different currencies. '

'Using the CIPS system customers are mainly trade and investment enterprises, if the foreign investment or foreign enterprises to domestic investors, such as FDI (foreign direct investment) to the territory to invest in RMB as a settlement currency, then you can use the CIPS; trade the use of a wider range of enterprises, and now we use relatively large overseas renminbi is trading class. 'Zhao Lei says.

But the system just on the line, trading company seems to have its own considerations watching general manager nine Ya Trade Co., Ltd. Shaoxing City Ding Jingxin accepted << China Economic Weekly >> reporter, bluntly, is mainly based on banks' foreign exchange settlement proposal, ' We now mainly settled in dollars, because the dollar against the euro is still relatively strong, and for us, stability is the first. '

'At present, with the RMB settlement business is not much, mainly upon customary use of settlement to be, now CIPS system just on the line, whether mature we do not know, but if the system is as more and more institutions to accept, We also recommend the use of RMB payment system to settle. 'Ding Jingxin say so.

Xu Sheng said that on October 8 on the line that day, Standard Chartered China CIPS completed by more than 200 pen RMB cross-border clearing, as of October 11 completed a total of nearly 456 pen, covering Asia, the Middle East, Europe, Oceania, Africa, the Americas and other area currently CIPS liquidation appears to give those large, time-critical for the liquidation of the customer to provide a new path.

In addition, Sun Lijian also proposed, CIPS convenience will vary in terms of the experience of ordinary people: 'With this settlement system, since we can swipe credit cards (CUP) is not by VISA and MaterCard, reduce costs CUP later, it investment and consumption will provide more convenient financial products overseas, because it reduces the cost of capital settlement, so it can share these benefits and customers. '

Outlook: RMB internationalization gain another victory

The experts were also excited about the role of the renminbi internationalization CIPS this big chess in 2014, two of the country's press conference, the central bank governor Zhou Xiaochuan was in answer to a reporter's question, On the Road:. 'If this is true internationalization of the RMB, There are not a lot of homework to do. '

Recently, Zhou Xiaochuan, when talking about the internationalization of RMB statement again: 'To strengthen the renminbi really want to stand in line with market expectations to that position, we must do their homework.' Renminbi cross-border payment system is undoubtedly It is the 'homework' is an important one.

The central bank said that as an important financial infrastructure, CIPS financial market infrastructure in line with the principle of << >> and other international regulatory requirements, to promote the internationalization of the RMB will play an important supporting role.

Industry experts are interviewed believe that the establishment of the RMB cross-border payment system for RMB internationalization landmark, is conducive to promoting the process of internationalization of RMB Sun Lijian said: on-line 'system marks the RMB internationalization of the most important infrastructure is completed, After the completion of the infrastructure like the original to the investment, if there is no independent clearing feature, subject to settlement turnaround time, it is difficult to make efficient international business, let alone international goal, so really a subversive environmental optimization. '

Xi Jun Yang also told reporters Analysis: 'Internationalization is a currency is widely used in the offshore, and now directly with our own billing system to complete, absolute efficiency is greatly improved, to accept pay RMB outside provides a great convenience for the RMB internationalization to provide protection of the fundamental.

'RMB internationalization more widely used, many foreign businessmen are willing to use the yuan to settle, which is a prerequisite for the use of this system, do not look at this premise does not make sense.' Zhao Lei told reporters the depth of interpretation, 'the future as the renminbi increase the share of international use, CIPS system will be widely used. renminbi use in the world of global trade, although now ranked fourth, but the money paid in RMB in the global market share of only about 2.8%, while the top three dollars The euro and sterling's share was 44.8%, 27.2%, 8.5% if the yuan in the global share market share paid in the currency raised to 5% to 6%, the total will be very big, so the function of CIPS more and more apparent, that's for sure. '

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