Banking

The Chinese currency renminbi, or RMB, is not ready for rapid appreciation at the moment and the rise of its international status needs "patience," Nobel laureate Myron S. Scholes told Xinhua in a recent interview.

"Obviously, RMB has to appreciate over time... You know it's not right to do this at the moment because of the immaturity of the Chinese economy," said Scholes on the sideline of the 4th Lindau Nobel Laureate meeting on Economic Sciences.

He said "China still needs an export-based economy at this time. Internal consumption levels are too low in China right now to support the entire economy."

China announced on Tuesday that all parts of the country are able to use its national currency, the yuan or Renminbi, in cross-border trade settlements.

Previously, only 20 provincial regions in the country could conduct cross-border trade settlements in yuan.

The policy was announced by the People's Bank of China, the country's central bank, and five other financial authorities.

The extension is a crucial step in boosting cross-border use of yuan, which is stated in the country's 12th Five-year Plan (2011-2015), and will better serve enterprises' needs and further facilitate trade and investment, the central bank said in a statement on its website.

The framework for bringing yuan funds raised offshore to mainland China will be in place by the end of this year, the Hong Kong Monetary Authority said Monday, adding the move could increase the issue of bonds and bank loans denominated in the currency in Hong Kong, the offshore yuan hub for China.

While on an official visit to Hong Kong, Chinese Vice Premier Li Keqiang on Wednesday announced several initiatives aimed at easing the flow of offshore yuan back into mainland China. Mr. Li suggested Beijing intends to follow through on the plans for what has been dubbed yuan foreign direct investment, but he didn't give a timeline.

China Construction Bank Corp, the world’s second-largest lender by market value, said first-half profit jumped 31 percent to a record as credit demand climbed.

Net income rose to 92.8 billion yuan ($14.5 billion), or 0.37 yuan a share, from 70.7 billion yuan, or 0.3 yuan, a year earlier, the Beijing-based lender said in a statement to the Shanghai stock exchange yesterday. Profit was in line with the 91.5 billion yuan median estimate of eight analysts surveyed by Bloomberg News.

Construction Bank joined rival Bank of Communications Co. in reporting record first-half profit as loan demand climbed in the world’s second-largest economy. Lending profitability also improved after China raised interest rates three times this year. Still, the lender’s Hong Kong-listed shares lost about a quarter of their value this year on concern defaults may climb.