The State Council on Wednesday identified five key manufacturing cities which will be permitted to conduct international merchandise trade transactions entirely in renminbi once the trial program for such settlement is launched, the Wall Street Journal reported. The five cities are Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan. The announcement is a step closer to the trial program for renminbi settlement, but Beijing has yet to announce when the program will begin or provide details on how it will work. Trade settlement in renminbi is a technical step that would move China closer to having a fully convertible currency. In addition, renminbi settlement could be cheaper and less risky for Chinese trading companies.
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