On December 11th, 2017, China Union Pay (CUP), together with over 30 commercial banks and payment institutions, launched a new version of its mobile payment APP, QuickPass (云闪付), starting a new battle in the mobile payment industry.
On December 31st the State Administration of Foreign Exchange (SAFE) of China announced more stringent rules on individual purchases of foreign currencies, alarming the Chinese citizens with increased restrictions on forex-related investments at the start of the New Year.
News is that the China International Payment System (CIPS) is ready and selected 20 banks are about to start testing, among which seven are subsidiaries of foreign banks. The new system was developed by PBoC and aims to be a significant improvement on the current way companies make cross-border RMB payments.
The PBOC has issued implementation rules for RMB cash pooling in China, which will facilitate cross-border RMB sweeping for multinationals, previously restricted to the Shanghai Free Trade Zone (FTZ).
In the latest SWIFT RMB tracker report, usage of RMB in cross-border payments involving HK and China increased 36% to 12%, but still has ways to go.
The RMB continued its relentless march towards being a trade currency with over US$15 billion in RMB bond issuance in the city-state of Singapore - more than doubling the issuance of 10 years ago.
In a heavily regulated market like China, it’s easy to point out what can’t be done, but sometimes difficult to identify what can be. Many banks look at the market and see it as being too difficult or as you might say in Chinese ‘mafan’ or troublesome. It is easy to look at any industry in China being like this, but what’s critical in the market is to find a unique opportunity and take advantage of it. For western banks, that could be the slow but steady internationalization of the RMB.