There are six Chinese renminbi trading centers around the world. Fresh data shows that by the end of April 2015, the trading volume in all six centers had reached 250,000,000,000 U.S. dollars per day on average. For domestic companies, the active Renminbi trading around the world provides them with another way to borrow money overseas.
Wang Lei is the deputy manager of China Huadian Corporation's Kashi Branch in the Xinjiang Uygur Autonomous Region. Wang used to worry about how to find enough money to maintain his company's power generation equipment. The problem was solved when the People's Bank of China launched its trial Renminbi cross-border lending service at the end of last year. Thanks to the trial, all registered companies in Kashi and other economic development zones now can directly borrow Renminbi from outbound lenders.
Wang Xiaodong, a governor from Kashi Branch, PBOC, he said "Our advantage is that there is no cap for the financing. This saved a lot for many companies."
Wang Lei's company is among the beneficiaries. Wang's company borrowed about 200,000,000 yuan via the Renminbi cross-border financing trial in February and July.
"We saved two million yuan in cost to borrow the 200,000,000 yuan. The application is simple and easy. We plan to continue using this service in the future." Wang Lei said.
Private company owner Li Yufei also enjoyed the service in Kashi. Li's company trades agricultural machinery at the border. He needs to first buy the machines before selling them. He tried to obtain bank loans but the cost was too high for small and medium sized companies. After the cross-border yuan financing trial began, he could borrow money from foreign lenders as well.
Li Yufei said "I borrowed one million yuan. The interest rate is a little bit more than three percent. It can save a lot for my company."
Analysts say cross-border yuan financing has no limit on borrowing amounts. So, it is easier for borrowers to get approved. The analysts say that after the yuan joins the Special Drawing Right in October, more and more Chinese companies will be able to get cross-border financing in the future. Moreover, companies can even use the yuan directly in international trade.
