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THE CHINA COLUMN: Are you yuan-enabled?

Bank of China has launched trading in yuan to US customers. Although there is still a long way to go before the yuan is fully convertible, the BOC move is a milestone in Beijing’s agenda to foster the currency’s globalisation, making it more accessible to individuals as well as businesses in the US.

Chinese regulators have also increased the number of exporters that can use the yuan to settle international transactions to nearly 70,000. According to Wall Street Journal, some analyst predict it will only be a few years before up to 30 per cent of China’s imports will be conducted in yuan rather than US dollars.

This is all exciting news, not only for the global financial markets, but for those who work in the industry.

It will create extra demand for professionals in the following areas: FX trading, especially those who are familiar with trading yuan and the relevant regulations; global trade settlements, particularly those involved in imports or exports settled in yuan; and investment bankers who are able to execute yuan-denominated debt or equity capital markets transactions.

There are other signs that 2011 will be a great year for those with yuan expertise. The World Bank, for example, issued its first-ever yuan-denominated bond in Hong Kong last month. And Shanghai hopes to encourage foreign firms to raise capital through equity and bond issuance this year. More than two dozen companies, including HSBC and NYSE Euronext, have said they will seek a listing on the Shanghai Stock Exchange, when an international board is launched.

The globalisation of yuan will play a key role in China’s efforts to build Shanghai into a global financial center. There will be more and more roles for yuan-enabled candidates in the future.

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