Page 6 - SCBJ-201601&02

South China Business Journal

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China Launches
International Payment
System to Boost E-commerce
Industry

China’s Central Bank has recently
launched the new China International
Payment System (CIPS) in Shanghai,
which will provide capital settlement
and clearing services for cross-border
RMB transactions affecting financial
institutions domestically and abroad.
The new CIPS was implemented in a
move to facilitate trade clearing services
for cross-border RMB transactions and
improve clearing efficiency for direct
participants in the RMB market. The new
system is expected to lower transaction
costs, reduce the processing times, and
thus ease pressures on both local and
international e-commerce platforms.

China’s domestic payments system only
supports Chinese characters, making it
difficult for overseas financial institutions
to directly clear RMB transactions with
their Chinese counterparts. Previously,
cross-border clearing of RMB funds
had to be transacted either through
one of the offshore RMB clearing
banks in places such as Hong Kong,
Singapore and London, or with the help
of a corresponding bank on the Chinese
mainland.

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