Published on : Jul 02, 2014
China and South Korea will soon have talk on discussing direct trading between yuan and won. The leaders from these countries will meet soon to discuss how to deepen the economic ties between these two countries.
China’s President Xi Jinping and South Korea’s President Park Geun Hye will discuss about the issue of making direct exchange possible between yuan and won, according to a statement published on the Blue House site. The Director General Ministry, Choi Hee Nam said that South Korea is currently setting up infrastructure for the direct exchange market, which can become functional this year.
These discussions come as China is seeking to promote use of its currency in global finance and trade. During the month of June, the British pound became the 5th major currency which can be exchanged directly for yuan in Shanghai. British pound joined dollars from Australia, New Zealand, U.S., and yen from Japan. China is the biggest export market of South Korea. It accounted for almost 25 percent of total shipments during the previous six months.
According to a Seoul-based researcher, An Yu Hua at Korea Capital Market Institute, the won-yuan direct exchange will have the biggest benefit for exporters who can cut their costs and risks for currency conversion.
The researcher further said that the crucial point will be whether direct exchange is allowed in Seoul and Shanghai, as South Korea tends have certain limits in allowing offshore trading of the won.