PUTRAJAYA: Malaysia is poised to become a major offshore renminbi (RMB) clearing centre for the Asean region following the appointment of Bank of China Malaysia as the clearing bank for the RMB currency.

Prime Minister Datuk Seri Najib Tun Razak said that as Asean was one of China’s largest trading partners, the RMB had a key role to play.

He said that with the rise of the RMB and its increasing recognition as a major global trade settlement currency, the establishment of a RMB clearing bank in Malaysia could not have come at a more opportune time.

“We anticipate Malaysia becoming a major offshore RMB clearing centre to facilitate direct trade settlement within the region.

“This could drastically lower transaction costs and benefit both China and Asean,” he said at the official launching of Bank of China Malaysia as clearing bank for the RMB in Malaysia here yesterday.

Also present were Transport Minister Datuk Seri Liow Tiong Lai, the Prime Minister’s Special Envoy to China Tan Sri Ong Ka Ting, China’s ambassador to Malaysia Dr Huang Huikang and Bank of China president Chen Siqing.

Najib said the opening of an RMB clearing bank, which he described as a critical financial initiative, would enhance ties between Malaysia and China further.

He said it would reduce liquidity risk, encourage the growth of pre­mium financial services in both countries and would further promote the facilitation of trade and investment between China and Malaysia.

“It will support increased bilateral trade and investment between our two countries and promote the use of local currency settlement for trade and investment.

“Most importantly, it shows that when Malaysia and China, and Asean and China, act together, it is for the mutual benefit and prosperity of everyone in the region,” he said.

On Malaysia-China ties, Najib said Malaysia was looking into the possibility of setting up new direct flights between Malaysia and China linking Malacca to Guangdong.

“We have discussed conducting the first combined military exercise between the two countries as well as building new railways, ports and industrial parks together.

“We also support China’s efforts to promote an inclusive regional growth agenda through a series of initiatives from the Asian Investment Infrastructure Bank to the 21st century Maritime Silk Road, both of which are expected to increase investment flow into the Asean region,” he said.