Under the continuous advancement of the Belt and Road Initiative, China's economic and trade financial cooperation with countries along the route keeps reaching new heights. The People's Bank of China (PBOC), based on the actual needs of cross-border trade and investment, actively carries out cooperation in the financial sector with Malaysia and Cambodia. Significant progress has been made in bilateral local currency settlement, injecting strong momentum into regional economic development.
China has been Malaysia's largest trading partner for 16 consecutive years and has maintained its position as Cambodia's largest trading partner for 13 consecutive years. It is also Cambodia's largest source of foreign investment and an important source of tourists. For many years, the PBOC has attached great importance to communication and exchange with Bank Negara Malaysia and the National Bank of Cambodia, continuously optimizing the policy environment and vigorously promoting the use of bilateral local currencies.
Among them, Malaysia is an important node country along the Belt and Road, with close economic and trade ties with China. China has been Malaysia's largest trading partner for 16 consecutive years. It is understood that in 2009, the PBOC signed a bilateral local currency swap agreement with Bank Negara Malaysia. Subsequently, both parties renewed the agreement multiple times and expanded the swap scale to support and maintain regional financial stability in both countries, facilitating bilateral trade and investment. In 2014, the central banks of the two countries signed a memorandum of understanding to establish a Renminbi clearing arrangement in Kuala Lumpur. The following year, Bank of China (Malaysia) was authorized as the Renminbi business clearing bank in Kuala Lumpur, supporting enterprises and financial institutions in both countries to use Renminbi for cross-border transactions. Under the close cooperation and policy support of the PBOC and Bank Negara Malaysia, bilateral local currency settlement business between China and Malaysia has developed rapidly.
In 2017, the interbank foreign exchange market in mainland China launched Renminbi/Khmer Riel regional trading, forming a direct trading rate for local currencies. In 2023, the PBOC signed a memorandum of understanding to establish a Renminbi clearing arrangement in Cambodia, authorizing Bank of China Phnom Penh Branch as the Renminbi business clearing bank in Cambodia, further facilitating cross-border trade and investment settlements in Renminbi for entities in both countries. Over the years, the policy environment for using local currencies between China and Cambodia has been continuously optimized, and the scale of cross-border settlements has grown rapidly.
Bilateral local currency settlement provides a convenient and friendly environment for entities in both countries to use Renminbi for cross-border trade and investment settlements.
According to statistics from the PBOC, in 2024, the amount of cross-border Renminbi transactions between China and Malaysia exceeded 300 billion yuan, ranking second among all ASEAN countries, with a year-on-year growth rate of 29%; of which, the amount of cross-border Renminbi transactions for goods trade exceeded 100 billion yuan, growing by 16%, accounting for 24% of the total cross-border receipts and payments in Renminbi and foreign currencies during the same period. In the first quarter of 2025, the amount of cross-border Renminbi transactions between China and Malaysia was 102 billion yuan, growing by 27% year-on-year.
On the Cambodian side, in 2024, the amount of cross-border Renminbi transactions was approximately 20 billion yuan, doubling year-on-year; of which, the amount of cross-border Renminbi transactions for goods trade was 4 billion yuan, growing by 32%, accounting for 9% of the total cross-border receipts and payments in Renminbi and foreign currencies during the same period. In the first quarter of 2025, the amount of cross-border Renminbi transactions between China and Cambodia was 5 billion yuan, growing by 45% year-on-year, of which the amount of cross-border Renminbi transactions for goods trade was 1.3 billion yuan, growing by 23% year-on-year.
The PBOC stated that it will continue to improve policies for the use of cross-border Renminbi, creating a more convenient and friendly environment for entities in China, Malaysia, and Cambodia to conduct cross-border trade and investment settlements, further deepening regional financial cooperation, promoting sustained prosperity in trade and economic exchanges, and achieving mutual benefit, win-win outcomes, and common development in the construction of the Belt and Road.
(This article comes from Yicai Global.)
Original Source: https://www.toutiao.com/article/7493881486920122907/
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