WITH the internationalization of the yuan, foreign companies have started investing in China using yuan.

    A foreign-owned company in Qingdao, Qingdao SITC International Logistics Development Co., received 264 million yuan in foreign investment recently, which was the first foreign firm in the city and Shandong Province to use yuan as registered capital.

    The investor of the project was its parent company, Qingdao SITC International Holdings Co. Ltd., which was listed in Hong Kong.

    The group went public in Hong Kong at the end of last year, raising HK$3.11 billion.

    To help the group transfer its money from Hong Kong to the mainland and attract companies in the city to invest more new projects in Qingdao, management committee of the National Qingdao Economic and Technological Development Area had made an agreement with the group last year.

    According to the agreement, the group will use the money raised on the Hong Kong stock exchange to invest two projects in the area, including a SITC international logistics park with an investment of US$70 million yuan and two port projects in Qianwan Harbor with a total investment of US$300 million.

    All the registration procedures were finished in a month and they had to wait for approval from the Central Government as it was not a common thing for a foreign company to invest with yuan.

    At present, this project was approved officially by the People’s Bank of China and the State Administration of Foreign Exchange and about 264 million yuan has been paid into the account.

    As a new way for foreign investment, investing with yuan can help investors avoid exchange rate risk. At the moment, there are another two companies in Qingdao which plan to invest with yuan and they are now waiting for approvals from regulators.

    The city’s commerce bureau said they would keep promoting this means of foreign investment in the city and attract more foreign investors. (Wang Yuanyuan, Zhou Jianliang)