Yuan investments: China wants to open financial markets more to foreign investors

The weak yuan and the Chinese economy's exports continue to attract international criticism. Now the country wants to relax the rules to make the national currency more attractive.

Chinese currency: Experts believe the yuan is significantly undervalued. Photo: Bloomberg

Beijing/Shanghai. China continues to open its financial markets to foreign investors. Investing in the local currency, the yuan, could meet global investors' growing need for diversification, China's central bank governor Pan Gongsheng said, according to a note released on Friday. The stable economic growth and rapid development of high-tech industries in the People's Republic provide solid support for yuan investments.

The central bank will also expand risk management tools, promote global acceptance of yuan bonds as collateral and strengthen cross-border financial infrastructure, Pan said.

In addition, the development of offshore yuan markets should be supported. This refers to financial centers outside of mainland China where the yuan can be traded - but without being subject to Beijing's strict state capital controls.

China is thus increasing its efforts to open capital markets and promote the internationalization of the yuan. This comes at a time when US President Donald Trump's trade war and unpredictable foreign policy are denting confidence in dollar investments.

Global financial markets have also become more unsettled as investors become increasingly concerned about the viability of large investments in artificial intelligence amid rising interest rates.

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