SWIFT, the Belgian financial communications service provider, announced on Wednesday that it had made a successful entry into China.
The Belgian company has founded a presence in the country without any outside participation. This represents a new development into the policy of Beijing, regarding the financial market opening process, according to PL English.
This measure marked a foreign company's entry into the world's second largest economy. On a personal note, the company welcomed the renminbi as the third international currency it accepted, right behind the dollar and the Euro.
Alain Raes, the SWIFT chief executive for Europe, Middle East, and Africa, said that the new subsidiary is wholly owned by the parent company. He shared how the company is also a result of the efforts of China to continue opening its financial market to the rest of the world, with new restrictions such as the reduction of ownership policies regarding foreign financial investors.
The company will continue to foster the extension of the renminbi for international use and connectivity between China's financial industry, as well as the international market with financial institutions included, Raes continued.
Michael Moon, the managing director of payments, trade, and communications for APAC, has also said that they opened a new wholly-owned foreign entity in Beijing for the purpose of localizing their various services as well as products, Hellenic Shipping News reported. A source from the company also confirmed the announcement of its official establishment.
The newly-established entity will be able to help SWIFT in providing products and services to the Chinese people, as well as maintain contracts behind the company's services. The Chinese entity will also allow it to offer the renminbi as the currency of choice in the country, alongside options for the US dollar or the Euro. It will also help the renminbi in its bid for internationalization amid worries of trade tensions and economic slowdowns.
The SWIFT RMB tracker had shown China's local currency as the fifth most active currency for international payments by value, scoring 1.99%. Overall payments in the currency had declined by 1.83% in contrast to May 2019. When combined with the other payments, currencies have decreased by about 3.55%.
SWIFT is formally known as the Society for Worldwide Interbank Financial Telecommunication. It has a global network in more than 200 countries. It currently has eyes on supporting the growing cross-border payments industry in China, which had grown rapidly in recent years. Policies enacted by the government, such as increasing cross-border payment licenses, have done much to help it develop.