And here is another sign that China one of the largest holder of US asset moving away from dollar asset.
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China to let yuan be used in some export deals
BEIJING: China will launch a pilot project allowing its currency to be used in some international trade transactions, the government announced, a move aimed at shoring up the country's battered exporters.
The program would permit use of the yuan in trade between the self-governed Chinese territories of Hong Kong and Macau and the heart of the mainland export industry, Guangdong province and the Yangtze River delta, the central government Web site said in a statement late Wednesday.
The statement also said transactions would be allowed between the southwestern Chinese regions of Yunnan and Guangxi and the 10-member Association of Southeast Asian Nations.
Other details were not announced, and it was not known when the program would begin, how long it would last or what mechanisms would be put in place to allow the money flow back and forth.
The program was one of several economic stimulus measures announced by Premier Wen Jiabao, including an increase in the number of stores in rural areas and a rise in export tax rebates for high-tech products.
Today in Business with ReutersAutomakers fear new normal of lower sales in U.S.Apple's Jobs says he will continue as CEONew sense of frugality for young Chinese workersThe currency pilot project aims to "improve financial services for exports" and "help small and medium-sized companies," the government statement said.
The Chinese yuan is currently not internationally traded and mainland companies seeking to do export business mostly work with dollars and euros. The pilot program would simplify the process at a time when Chinese exporters have been hammered by a drop in foreign demand, leading to thousands of factory closures and layoffs.
The malaise is also spreading inland as domestic demand for steel, autos and other goods weakens. Communist leaders have warned that more job losses might fuel unrest and are pressing employers to minimize cutbacks.
In the longer term, the program could be a small first step toward allowing the yuan to be traded internationally, with increased demand for Chinese currency helping to boost its value.
The U.S. has long argued that the yuan is undervalued, giving China's exporters an unfair price advantage and adding to its trade surplus.
China to let yuan be used in some export deals - International Herald Tribune