according to a survey by deutsche bank, it is possible to negotiate average price reductions of just under 5 %. 4 many chinese enterprises prefer to invoice in renminbi in any case, as it is difficult for them to exchange foreign currencies for renminbi. german entrepreneurs that wish to bolster their market position in china now have a way of entering into business dealings with such chinese enterprises easier. despite these advantages, many enterprises still hesitate to use the renminbi. the reasons given are the renminbi ’ s sticky convertibility and restrictions on the movement of capital. furthermore, until recently it was not possible to directly trade euros and renminbi. additionally, many smes shied away from using offshore markets like hong kong, since they want to avoid operating in a different time zone and business language. these caveats are now cleared away by the ongoing liberalisation. 2. 3 milestones since the end of september, it has also been possible to trade euros and renminbi directly on the chinese interbank foreign exchange market at an exchange rate fixed by cfets time period : august 2012 to august 2014, source : http : / / www. swift. com / assets / swift _ com / documents / products _ services / rmb _ tracker _ sept2014 _ sdc. pdf. swift data http : / / www. hsbctrinkaus. de / tubweb / pressroom. nsf / 0 / 4ca9d61803f1d8dec1257d1000264358 / $ file / 2014 – 07 – 09 % 20pm % 20hsbc % 20internationalisierung % 20renminbi % 20studie % 202014. pdf. https : / / www. db. com / medien / de / content / 3862 _ 4188. htm. bis central bankers ’ speeches ( china foreign exchange trade system ) in shanghai. the euro has thus become the tenth currency to be exchangeable directly for renminbi. 5 in addition, the chinese government is currently strengthening the renminbi offshore markets, giving importers outside china a means of paying in renminbi. this year, the chinese authorities gave the go - ahead for the first clearing banks outside asia : germany had the honour of underwriting the first memorandum of understanding on renminbi clearing in europe. subsequently london, paris, and luxembourg followed. in future, german

joachim nagel : internationalisation of the renminbi – challenges and opportunities speech by dr joachim nagel, member of the executive board of the deutsche bundesbank, at the european - chinese banking day at the euro finance week, frankfurt am main, 17 november 2014. * 1. * * introduction ladies and gentlemen i thank you for the invitation and for the opportunity to speak at today´s european - chinese banking day. the 17th of november is a significant date in global trade. one of the world ’ s most important waterways, the suez canal, was opened 145 years ago today. at the time it was just 22 metres wide and 8 metres deep, but it shortened shipping routes significantly. european vessels on their way to asia have been able to bypass the much longer route around the southern tip of africa ever since. 51 years ago today, another important transport route was inaugurated : the europe bridge in the alps. it is the centrepiece of the austrian brenner autobahn, which is now one of the most important north - south routes in europe. but today, on 17 november 2014, the focus isn ’ t primarily on the movement of people or goods, but on payment transactions. today we want to celebrate the fact that it is now possible to settle transactions in chinese renminbi via a local clearing bank here in frankfurt. from now on, it will no longer be necessary to make use of other trading centres like hong kong or other trading hubs for this purpose. i shall talk in more detail about the frankfurt clearing bank in a moment. however, i first want to point out where the renminbi currently stands in its process of internationalisation, and what conditions were necessary for the transformation from a trade currency to an investment currency, and what needs to be fulfilled becoming an international reserve currency. 2. status quo : internationalisation of the renminbi 2. 1 trade links the german writer and critic kurt tucholsky noted all the way back in the 1930s that the world economy is interwoven. 1 this is true of today ’ s globalised world more than ever before. of course, at the time tucholsky could not have anticipated the rapid pace of development that the people ’ s republic of china would undergo to become the second largest economy in the world today. as the world ’ s largest exporter, china ’ s foreign trade relations with other countries are highly integrated. this is certainly true of china ’ s economic ties with germany, which ranks