China’s yuan replaces US dollar as most used currency in Greater Bay Area
The yuan replaced the US dollar as the most used currency in transactions in the Greater Bay Area development zone, a local branch of the country’s central bank said.
The yuan replaced the US dollar as the most used currency in transactions between Hong Kong and Macau and the nine mainland Chinese cities that together make up the Greater Bay Area development zone, a local branch of the country’s central bank said.
Transactions worth 17.2 trillion yuan (US$2.65 trillion) were cleared in the zone last year, the Guangzhou branch of the People’s Bank of China (PBOC) said on Thursday.
The development zone, which includes Guangdong province’s largest economies, Guangzhou and Shenzhen, is home to more than 70 million people. It had a combined gross domestic product of US$1.65 trillion as of the end of 2019.
The bay area plan positions Hong Kong as a global offshore yuan hub and Macau as a yuan clearing centre for Portuguese-speaking countries owing to its former status as a Portuguese colony. Expanding the use of the yuan in the zone is a core part of increasing access to financial markets in the Greater Bay Area, which includes cross-border yuan interbank lending and trading of derivative products denominated in the Chinese currency, according to the plan.
The PBOC’s Guangzhou branch on December 14 last year opened up direct electronic billing across the border for Macau residents, allowing them to pay water and electricity bills without opening a mainland Chinese bank account. Last year, Hong Kong and Macau residents opened more than 127,000 type II and type III mainland settlement accounts, which are created without needing to travel across the border, the bank said.
Type II accounts only support withdrawals or transfers of a maximum of 10,000 yuan every day. Type III accounts have no such restriction, but they can only have a balance of 2,000 yuan at most.
The PBOC’s Guangzhou branch said cross-border electronic billing could making the lives of the development zone’s residents more convenient. The zone is being advertised as a “one-hour living circle”, where residents and capital can move more freely between the 11 cities compared to other areas in mainland China.