Yiwu to embark on financial reform

Yiwu's government on Tuesday released a seven-point financial-reform plan that aims to build the export-oriented city in Zhejiang province into a financial trading center for local exporters.

The plan includes a trial program for individual cross-border yuan trade settlements.

The draft plan, originally submitted by the city on Dec 26, 2012, was approved by the State Council on Aug 23.

The cabinet's move makes Yiwu the fourth region in China to launch financial reforms after the cities of Wenzhou (also in Zhejiang), Quanzhou (in Fujian province) and the Pearl River Delta region as a whole.

City officials held a news conference on Tuesday where they released a summary of the reform plan. The program aims to develop a financial system that will boost the city's role in global trade, as well as promote economic and industrial upgrading by 2020.

Yiwu is the first city in China to have individual cross-border yuan trade settlements, which are intended to be an innovative financial product to promote the growth of trade conducted by independent entrepreneurs in the city. The settlement program was approved at the end of 2012 by the People's Bank of China.

As the country's largest wholesale market for small commodities such as household gadgets and toys, Yiwu was chosen to test the trade-settlement system to highlight the importance of reform through financial innovation.

Many independent entrepreneurs in Yiwu sell items for export, making the city an international trade hub.

Since 2012, "the trial cross-border yuan trade settlement has helped local individuals to complete deals valued more than 6 billion yuan ($980 million)", Mayor He Meihua told the news conference.

He said the program gives local entrepreneurs a hedge against currency risk.