BEIJING: China has welcomed Pakistan’s move allowing the yuan to be usedfor imports, exports and financing transactions for bilateral trade andinvestment activities.
China’s Foreign Ministry Spokesperson Geng Shuang said on Thursday thatbilateral monetary cooperation has been deepening since China and Pakistansigned a bilateral currency swap agreement in 2011.
“At present, various forms of trade and investment cooperation betweenChina and Pakistan have developed in depth,” he added.
Pakistan’s central bank had stated on Tuesday that public and privatesector enterprises may use the yuan for bilateral trade and investment.
“We encourage market players in both countries to use domestic currencysettlement in bilateral trade and investment and welcome Pakistan’sinitiatives,” replied Shuang when asked to comment on Pakistan’s move.
China believes this will provide a good financial environment for bilateraleconomic, trade and investment cooperation and the construction of theChina-Pakistan Economic Corridor, he added.[image: an image]
Additionally, the State Bank of Pakistan istaking measures to ensure thatimports, exports and financing transactions can be denominated in yuan(RMB) in both public and private sectors (both Chinese and Pakistani) andpeople are free to choose RMB for bilateral trade and investment activities.
Both public and private sector enterprises may use the yuan for bilateraltrade and investment, the State Bank of Pakistan had said in a statement onTuesday.
“As per current foreign exchange regulations, Chinese Yuan (CNY) is anapproved foreign currency for denominating foreign currency transactions inPakistan,” it said.
“In terms of regulations in Pakistan, CNY is at par with otherinternational currencies such as USD, Euro and JPY,” it added.
The bank said that in light of CPEC, the move would “yield long-termbenefits for both the countries”.
The $54 billion CPEC was launched in 2013 to link western China to theIndian Ocean via Pakistan and has been hailed as a “game changer” byPakistani officials.