French minister pushes Paris as yuan hub during first China-France economic dialogue

BEIJING, China – France’s finance minister pushed Paris as a European hub for trading of China’s currency on Tuesday at the first high-level economic and financial dialogue between the two countries.

The yuan is not freely convertible with most other currencies due to China’s capital controls but Beijing is gradually loosening its grip, creating opportunities for the currency to become more widely used for trade and investment outside of China. Currently, most of China’s trade is denominated in U.S. dollars.

“I emphasized the role of France as a hub for the internationalization” of the yuan, said Finance Minister Pierre Moscovici. “We will see some progress in that direction in the coming weeks and months.”

London, Hong Kong and Singapore are also vying to be centres for yuan trading.

Chinese Vice Finance Minister Zhu Guangyao said at a later news conference that “China holds an open attitude toward the issue.”

He said total trade between China and France stands at $50 billion, 20 per cent of which is transacted in yuan.

The economic dialogue was chaired by Moscovici and Chinese Vice Premier Ma Kai. Discussions covered global governance, fiscal and financial co-operation, trade and investment.

They oversaw the signing of an agreement to avoid double taxation and prevent tax evasion, with the intention of increasing trade and investment between China and France.