SA's travel and trade links with China flourishing

"Yuan card volumes are increasing at a steady pace, with month-on-month growth reaching a high of 62% in February," the bank said, adding that sales of bank notes and direct settlement transactions in Yuan were also on the rise.

Ion de Vleeschauwer, Bidvest Bank's chief foreign exchange dealer, said that there were several drivers of this trend.

"Direct flights between SA and China were recently introduced. SA is now part of the Brics trading block and China, of course, is a core member. Chinese imports into SA remain strong while increased business travel to China has led to increased leisure travel or longer stopovers.

"The convenience and security of the Yuan World Currency Card are also factors. Our business people use it to entertain their Chinese counterparts, settle hotel bills and go shopping - all of which leads to increased volumes of Yuan-denominated business," De Vleeschauwer said.

Another development that had bolstered Yuan volumes at Bidvest Bank was a newly introduced system of official rebates on trade transactions, the company said.

US dollars remained the international settlement currency of choice for Chinese suppliers and manufacturers, but settlement in Chinese currency was now encouraged in certain circumstances, De Vleeschauwer said.

"The Chinese authorities apply rigorous controls and have traditionally preferred settlement in dollars, but in some cases offer a rebate to encourage direct settlement in their own currency," he said.

"For all these reasons, we are very happy to have given a lead by introducing Yuan-based cards and making Chinese banknotes a standard part of our currency range. Timing could hardly have been better."