On July 3rd 2009, the Indonesian branch of ICBC opened the first time L/C in RMB worth RMB 372 thousand in favor of an export enterprise in China for PT.INDOTRUCK UTAMA in Indonesia, which is the first letter of credit in RMB for cross-border trade, and also indicates that ICBC has officially started its RMB cross-border trade settlement business.

As one of the first commercial banks that have started RMB cross-border trade settlement business, the three pilot branches of ICBC in Guangdong, Shenzhen and Shanghai will open this service in the coming week.

According to an ICBC official, since the central government decided to choose pilot banks in some areas to launch RMB cross-border trade settlement business last year, ICBC has taken the initiative to prepare and has so far established necessary systems and institutions. At home, ICBC has realized the connection between its full-function banking system and the settlement system of People's Bank, which provides a reliable system for RMB cross-border trade settlement. At abroad, ICBC has opened RMB settlement accounts at its correspondent banks in Hong Kong, Macau and eastern Asian region and at its overseas branches such as ICBC (Asia), Macau branch, Macao Seng Heng Bank, ICBC (Indonesia), and Singapore branch, and made preparations in operation process, system construction and client service.

ICBC's RMB cross-border trade settlement services cover all means of payment for international trade such as remittance, collection and letter of credit, and can provide different trade finance solutions and RMB financial management schemes for our clients, the official further explained. After the foreign trade enterprises gain approval from the government, the operation process for them to apply for RMB cross-border trade settlement service is rather simple in ICBC. They need only open settlement accounts at the ICBC branches in Guangdong, Shenzhen and Shanghai to apply for and use the service. In addition, ICBC also provides consultancy and training for foreign trade enterprises and overseas banks on the policies and operation processes concerning RMB cross-border trade settlement.

According to the industry insiders, RMB cross-border trade settlement brings a set of benefits and advantages to the foreign trade enterprises. Firstly, enterprises no longer need to exchange currencies when making import and export payment, which reduces their costs and exchange rate risks. Secondly, enterprises are free from handling the foreign exchange verification and write-off, which simplifies the processes for import and export trade. Thirdly, application procedures for export rebates are greatly simplified; and as the rebates the exporter applies for and that the tax agency refunds are of the same currency, the exchange loss is avoided. Lastly, clients can use different tools to finance their international trade without taking on more financial burdens. For cross-border trade groups, they can also manage their group fund more flexibly and efficiently.

Industry insiders also points out that RMB cross-border trade settlement business has a high demand for the comprehensive service capabilities of a bank. For ICBC, its leading position in the market, global financial service network, and solid scientific and technological strength will all contribute to promoting its RMB cross-border trade settlement business.

ICBC will take the opportunity of developing RMB cross-border trade settlement business to further implement its international development strategy and to expand its business in such areas as international settlement and trade financing, so as to provide more comprehensive and sound financial services for the economic and trade cooperation between China and the world. The ICBC official said.