Support for currency's internationalization
China on Monday encouraged Russia to issue yuan-denominated sovereign bonds at an appropriate time. Experts noted that this shows China's goal of pushing internationalization of the currency.
The suggestion was made at the seventh Russia-China Finance Ministerial Dialogue held on Monday in Shanghai, where both sides exchanged views on issues including the macroeconomic situations in China and Russia, structural reform and bilateral financial cooperation.
Xi Junyang, a finance professor at the Shanghai University of Finance and Economics, said the fact that China is encouraging the issue of yuan-denominated sovereign bonds by other countries shows the nation is determined to push internationalization of the yuan.
"A sovereign bond is a government bond, so if other countries issue such debt, it will boost the yuan's role as a reserve currency," Xi said.
In June 2016, the Ministry of Finance issued a three-year government bond of about 3 billion yuan ($440 million) on the London Stock Exchange, the first sovereign yuan-denominated bond issued outside China.
At the dialogue, the two sides also agreed to sign a bilateral audit management cooperation agreement, proceed with communication about treasury management reform, strengthen communication on tax reform as well as provide a good political environment for bilateral trade and investment.
According to Xi, many countries remain reluctant to issue yuan-denominated bonds because the currency is not widely used around the world.
The two sides also said that they would oppose trade protectionism and carry out financing cooperation under the "Belt and Road" initiative, as well as promote the establishment of a long-term, stable, sustainable, diversified and risk-controllable financing system.
