Guangxi, China’s southern provincial-level region, is researching cross-border finance, supply-chain service platforms and e-CNY applications, according to a report by local state-run media Guangxi Daily.
Fast facts
- The Guangxi autonomous region — often seen as a gateway for Association of Southeast Asian Nations (ASEAN) trade — plans to support cross-border circulation of capital, according to the report.
- This comes as the Regional Comprehensive Economic Partnership (RCEP) — a free-trade agreement between China, seven ASEAN countries, South Korea, Japan, Australia and New Zealand — came into force on Jan. 1.
- China has already been testing the cross-border use of the digital yuan. For example, Shenzhen, being a part of the so-called Greater Bay Area, has started a policy to allocate 10 million yuan (US$1.57 million) each year to reward the enterprises that implement cross-border e-CNY projects in the city.
- Another crucial hub for cross-border e-CNY is South China’s Hainan province, an island that has long been a popular tourist destination with the central authority planning to make it a free trade center like Hong Kong. The province is giving a big push to trial the e-CNY’s cross-border use to boost import and export businesses in the next five years, as the province specified in its provincial five-year plan.
- Matteo Giovannini, a senior finance manager at Industrial and Commercial Bank of China, one of the nation’s biggest commercial banks, previously told Forkast.News that RCEP and China’s Belt and Road Initiative (BRI) will pave the way for the country’s digital yuan expansion across Asia. “Through BRI and RCEP, China could strengthen trade ties with neighboring countries and, due to its economic weight, push for an increased cross-border adoption of digital yuan across different regions.”
- As many experts have said, the digital yuan is not intended to replace the dollar as a reserve currency. “Instead, it’s laser-focused on one goal: facilitating trade with China,” Richard Turrin, a Shanghai-based fintech consultant, told Forkast.News in September. “China’s CBDC will give users large and small access to a digital ecosystem for global trade, making transacting with China as easy as buying on Amazon or Alibaba.”