The picture shows staff members taking a group photo at Soekarno-Hatta International Airport in Jakarta. (Photo provided by TransNusa)
High above the clouds, aircraft dance gracefully; beneath the Silk Road, dreams bloom. The C909 passenger aircraft, a modern wonder carrying the Chinese aviation dream, transfers across borders, connects hearts, and sketches a new chapter of the internationalization of the RMB along the Silk Road.
Since the first domestically-made jet arrived in Jakarta, Indonesia in December 2022, with the support of multiple institutions including the Agricultural Bank of China Shanghai Branch (ABC Shanghai Branch) and China Aircraft Leasing Group Holdings Limited (CALC), the C909 has gradually achieved full RMB international settlement in the "purchase + lease" chain. This movement adds financial "wings" to the "going global" of China's large aircraft.
Outstanding Performance of China's Large Aircraft on International Stage
"From the cabin to the exterior, the C909 looks on par with, even better than, the mainstream models in the market," said Leo Budiman, the vice chairman of Indonesian airline TransNusa.
The C909 is developed independently by China with full intellectual property rights. It was first delivered to TransNusa in December 2022, featuring an all-economy class configuration and a capacity of 95 passengers. Its excellent performance in high-altitude and extreme temperature environments makes it ideally suited for the inter-island routes within Indonesia, known as the "Thousand Islands" country.
With Jakarta, Bali and Manado serving as hubs, the China-made aircraft is weaving a dense network of short-haul inter-island routes and gradually expanding its international routes. "We hope to leverage Indonesia as a starting point to support the enhancement of C909's influence in the global market, and gradually promote the domestically made large aircraft to the world stage," said Liu Wanting, the president and chief commercial officer of CALC and Chinese Chairman of TransNusa.
Financial Game: Pioneer New Model of Cross-border Settlement for China-made Civil Aircraft
The export of China's domestically-made aircraft not only represents a competition in technological hard power but also shows a game in financial payment service capabilities. Aircraft leasing is a typical high-value, long-cycle cross-border transaction in the high-end equipment sector, traditionally dominated by USD settlements.
The exportation of C909 was settled by RMB for both the "purchase end" and "leasing end", constructing a closed loop of its own financial chain of "currency-bank-system", and pioneering a new model for cross-border settlement for China's domestically-made civil aircraft.
Operationally, ABC Shanghai Branch has established Free Trade Accounts for the relevant domestic and overseas entities of CALC, while TransNusa opened an account at a local Chinese bank. Funds were directly transferred via the Cross-border Interbank Payment System (CIPS) to CALC's account at ABC Shanghai Branch, realizing full-chain RMB clearing and ensuring the safety of the funds.
"We were deeply impressed by ABC's professionalism, dedication, and highly efficient coordination through the delivery process. Their performance in cross-border financial services is truly outstanding," said a relevant executive from CALC. The RMB settlement mechanism builds a "firewall" against exchange rate fluctuations for the overseas operation of domestic aircraft, effectively reducing the exchange rate risk for enterprises. At the same time, the settlement time has been reduced from 3 to 5 working days to 1 to 2 days, significantly improving the efficiency of fund settlement.
The picture shows the delivery of the regional jet airliner C909 (formerly known as ARJ21) to Indonesia airline TransNusa. (Xinhua)
Exportation of C909 Ushers in New Chapter in RMB Internationalization in Offshore Service Trade
The transformation of settlement models is accelerating its penetration into the upstream and downstream of the industrial chain. According to an executive from ABC, this has led to the exploration of a future cooperation path covering the entire industrial chain, including after-market services, overseas leasing, and export credits. The "all-round and multi-dimensional" application practice of RMB is in line with the framework of the RMB settlement between China and Indonesia, providing an option to avoid the risks of the USD for countries like Indonesia in Southeast Asia.
"Due to the extensive use of the USD in trade, the Association of Southeast Asian Nations (ASEAN) countries' currencies are highly susceptible to the monetary policies of the Federal Reserve, resulting in significant volatility. Therefore, it is necessary to reduce our economic dependence on the U.S. dollars," said Muhammad Faisal, executive director of the Center of Reform on Economics Indonesia. The benefit of payment connectivity lies in the greater stability and strength of ASEAN currencies, which can better withstand external shocks or changes in the global economy, and also promote trade and investment growth.
Since 2017, Indonesia has cooperated with Malaysia, Thailand, Japan, and China to use local currencies for settlement. "The trend of emerging markets turning to local currency settlement in international trade is becoming increasingly evident, reflecting their growing awareness of the importance of global economic stability and balance," said Muhammad Faisal.
EBC Financial Group, a global foreign exchange and financial derivatives broker, analyzed that the bilateral local currency settlement and currency swap agreement between China and Indonesia also provides a buffer for the Bank Indonesia to cut interest rates. With the held RMB reserves, the Bank Indonesia can be more flexible to realize goal of stabilizing the exchange rate. This cooperation also makes it easier for Indonesia to obtain funds from the New Development Bank to accelerate national infrastructure construction and reduce reliance on USD-denominated debts.
From a two-aircraft formation performance at the Nanchang Air Show to the stunning appearance at the Bali International Airshow, the C909 is flying towards the world with the confident posture of "Made in China". ABC is using financial support to give wings to China's domestically-made aircraft and continue to open a new chapter of the coordinated development of "Made in China" and the internationalization of the RMB. (By Feng Yulin)
A single purchase
