The Yunnan Cross-Border Renminbi Settlement Center was announced at the Dianchi summit on monetary cooperation. [China Daily]

The Kunming cross-border renminbi currency settlement center unveiled at the recent summit on monetary cooperation in the city is an important step in developing the capital of Yunnan into a pan-Asia financial services hub, according to a local official.

The center designed to facilitate foreign trade in the region will also offer strong support for Yunnan's strategy to become a regional trade and transport gateway, according to Qiu He, Party chief of Kunming, capital of the province.

"With the China-ASEAN Free Trade Area and the completion of a number of cross-border facilities, the city has seen increasing business with neighboring countries," Qiu said.

"Kunming is expecting to continue the momentum with more measures for trade and investment - offering better financial services is among them," Qiu said.

Zhang Zulin, mayor of Kunming, noted the development of a regional financial service hub is a long-term project.

Long-term plans

He said local authorities are now cooperating with the Financial Research Institute of the People's Bank of China to draft both medium and long-term plans for the city's financial development.

Although the plan is not complete, Zhang revealed that development of Kunming into a financial hub will be implemented in three steps.

First, the renminbi settlement center will extend its business network to 25 counties and cities along the border and improve connections with local banks.

The second step will extend the center's business network to the whole province and open operations in neighboring provinces and countries.

The long-term goal is to have a modern, multifunctional financial hub doing business across the globe in cross-border currency settlement, capital funding and investment, cash flow monitoring, information consultation and service outsourcing.

While attracting foreign banks to open operations in Kunming, it will also encourage domestic banks to use Kunming as a springboard to expand their businesses in Southeast Asia and South Asia.

Participants in the recent Kunming summit representing governments, banks, the media and the academic circles in the region offered their suggestions on how Kunming can develop into a regional financial hub.

Du Jinfu, vice-governor of the People's Bank of China - the nation's central bank - said the central bank will partner with other government bodies and research institutions to study new policies, services and management measures to promote renminbi settlement in Yunnan as well as the rest of the country.