China opened a currency trading center in its border with Vietnam yesterday in a move widely expected to halt widespread illegal private currency trading.
The Association of Southeast Asian Nations (ASEAN) Currency Business Center is located in Dongxing City, an urban area in China’s Guangxi Zhuang Autonomous Region.
The center, which is the first one in China, will facilitate direct conversion of the Vietnamese Dong and the Chinese yuan, according to Zhang Xiaogao, who heads ABC Guangxi branch’s International Business Department. He further said the center will make it easier for businesses located at the border to conduct business, and halt rampant illegal currency trade, reported Xinhua.
Previously, legitimate exchange of the two currencies involved using the U.S. dollar as an intermediary, spawning the illegal trade of direct yuan-dong exchanges in the border areas. Some quarters have continually criticized the trade, saying that lack of supervision exposed traders and tourists to the possibility of being conned with counterfeit money by private currency traders.
The establishment of the center will therefore provide a more convenient and secure method of forex exchange which will spell doom to private currency trading. The move is also part of China’s gradual shift to allow yuan to trade directly with more currencies.
China accounted for much of Vietnam’s international trade last year, with trade between the two countries valued at US$50.21 billion, representing an annualized growth rate of 22 percent, according to Vietnam Custom’s data. Imports grew 28.4 percent to US$36.95 billion, while exports to China rose 7 percent US$13.26 billion. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at firstname.lastname@example.org