BEIJING (Reuters) - China’s Industrial and Commercial Bank (ICBC) signed a pact with the Los Angeles city government to promote cross-border yuan trade and set up an offshore renminbi center in California, the bank said on Saturday.
The move to create an offshore RMB center in the largest state in the United States would lay the foundations for greater yuan trade with China, ICBC said in a statement.
The agreement comes at a time when many other countries are ahead of the United States in establishing cross-border trade in yuan.
The United States has lagged other markets in seeking to set up offshore yuan trading hubs because the U.S. dollar remains the world’s dominant currency and U.S. firms are reluctant to accept the yuan, a Chinese bank executive said.
Beijing wants to promote its currency to more international investors and eventually turn the “redback” into a global reserve currency, while at the same time expanding its already considerable political and economic clout.
About 15 percent of China’s trade was settled in yuan in the first nine months of 2014, up from less than 1 percent in 2009.
In the first nine months of 2014, cross-border payments between the United States and China reached more than 160 billion yuan, ICBC data show.
During that time, ICBC’s cross-border business was worth nearly 28 trillion yuan, up more than 80 percent from the corresponding period last year.
Reporting by Dominique Patton; Editing by Clarence Fernandez