The PBoC Deputy Governor Says The Bank Wants To Keep Developing Cross-Border Payments

The People’s Bank of China (PBoC) is interested in continuing to promote the healthy development of cross-border payments in the principles of openness, cooperation, and mutual benefit. This is what the bank’s deputy governor, Lu Lei, said during the recent opening plenary at Sibos.

China To Open Up To Cross-Border Payments

Sibos, the global financial services networking event organized by Swift, recently saw the discussion of a number of topic, including China’s role in international payments.

Commenting on China’s stance, Lei said that he would discuss the topic of opening up China’s financial markets. That would enable the country to interlink with the rest of the world and enable cross-border payments.

He noted that the country’s financial sector has, and will continue to embrace opening up and cooperation. The country has learned from its past experiences, which have shown that opening up is an important driving force for the high-quality development of its financial sector. With the country’s goal being further financial market development, opening up is the logical next step.

Furthermore, he said that China has already lifted foreign ownership proportions for banks, life insurers, and securities firms. Also, the PBoC has connected foreign investors to over 110 financial institutions in the country. Finally, Lei noted that Mastercard was recently allowed to conduct domestic payments, which is another step toward opening the country to the rest of the world.

China Has Already Seen Major Developments In The Financial Sector

Commenting on the state of financial markets, Lei said that foreign investors can now invest in the Chinese market, either through connect mechanisms, or directly if they wish to do so. “China’s bond market is the second largest in the world, with foreign investors holding nearly 4.6 trillion yuan in Chinese bonds, reaching a historical record,” he pointed out.

Speaking about the future, Lei noted that China will continue to provide an enabling environment for international investors interested in entering and operating in the country.  However, it will also support high-quality local firms that want to go public and issue bonds in overseas markets. The PBoC also intends to encourage Chinese sovereign wealth funds and financial institutions to invest abroad.

Lei was also able to confirm that China will actively participate in global financial governance, saying: “We will strengthen cooperation with international financial organizations and the central banks of major economies, engage in global financial governance and policy coordination, and make joint efforts to promote global economic growth and financial stability.”

So far, China has established working groups in the EU and US in 2023, which serves as evidence of their efforts to strengthen cooperation and communication. The country has also seen an explosion of fintech within its borders in recent years, with mobile and online payments enhancing accessibility significantly. Inclusion and efficiency of payment services have also blown up, making positive progress in facilitating cross-border trade, investment, and personnel exchange.