Background - using RMB for China trade and business
- RMB is not international currency;
- China is major production base in the world (export);
- and China is becoming a stronger consumer of western product and services (importer);
- as RMB raise in value, and fluctuate in value, it is worthwhile for both buyer and seller to use RMB for business;
- however, a non-China company cannot keep RMB in bank account - especially outside of China;
RMB bank account is possible for hong kong company in hong kong
- Hong Kong is granted special status by China government to allow Hong Kong company to keep RMB bank account in Hong Kong;
- purpose is to facilitate China business;
How it works
- a Hong Kong company can open multi-currency bank account with hong Kong HSBC;
- when the Hong Kong company needs to pay RMB to China
- it ensures the China company is a "qualified company" in China to receive RMB from Hong Kong;
- then, gives instruction to Hong Kong HSBC to transfer RMB to China company;
- and instruct the bank from which bank account balance (HK$ , US$ , Euro .. etc.) to deduct the money;
- the company can enter into contract with HSBC to hedge the exchange rate;
- when the Hong Kong company needs to receive RMB from China
- the China side money payer will clear the procedure in China;
- and the money will reach Hong Kong company RMB account in Hong Kong;
- the Hong Kong company can keep the money in RMB or convert to other currency;
Important
- when the Hong Kong company needs to withdraw or transfer RMB balance in its RMB account, it needs to convert into other international currency first;
- RMB keeping in RMB account can be used for investment purpose of RMB product (such as RMB bonds in Hong Kong);
- the mechanism does not allow converting RMB for value speculation purpose;
US$ 1 to RMB in since 2004 
Annoucement by People's Bank of China
- Administrative Measures on Settlement of Cross-border Trade in RMB on a Trial Basis (Chinese).
- Issuing Authority : People's Bank of China, Ministry of Finance, Ministry of Commerce, General Administration of Customs, State Administration of Taxation and China Banking Regulatory Commission.
- Date of Issuance : 1 July 2009.
- Effective Date : 1 July 2009.