Leaders of China and South Korea agreed on Thursday on a series of steps aimed at spurring offshore use of the yuan and investment in Chinese capital markets, Seoul’s finance ministry and central bank said.
China agreed to award an 80 billion yuan ($12.88 billion) licence for South Korea to invest in Chinese capital markets, help launch the direct trading of the yuan-won pair and establish a yuan-clearing system in South Korea.
The renminbi qualified foreign institutional investor, or RQFII, licence allows the holder to invest renminbi funds within Chinese capital markets.
The Ministry of Strategy and Finance and the Bank of Korea said in a joint statement these steps were agreed to at a summit between Chinese President Xi Jinping and South Korean President Park Geun-hye in Seoul.
China is the world’s largest exporter and South Korea the seventh. Their bilateral trade totalled $228.9 billion in 2013. ($1 = 6.2115 Chinese Yuan Renminbi) (Reporting byChoonsik Yoo)