RMB-denominated trade rises in Q1

China’s foreign trade settled in renminbi rose to around 7% in the first quarter of 2011, up from 0.5% in 2010, the Wall Street Journal reported, citing  state media. A central bank official said that the country’s banks dealt with US$55.2 billion in international deals for the first quarter, up from US$47.4 billion in the fourth quarter of 2010. The rises are a result of continued liberalization of China’s capital controls, which increasingly use Hong Kong as a base “offshore” renminbi transactions. Pilot schemes to settle cross-border trade begun in 2009 have greatly expanded, and renminbi trading is now allowed in many global financial centers. Analysts say widely held expectations that the currency will appreciate means foreign buyers and sellers are more likely to accept the renminbi as payment, but a continued dearth of investment options may eventually curb their appetite.