COMPANIES are poised to take advantage of the yuan-backed foreign direct investment program, according to a senior banker.

Pei Yigen, treasury and trade solutions product head of Citibank China and the Shanghai branch manager, said: "Lots of companies, most of them multinational, have asked us about the new program. The inquiries are from varied industries from various countries and regions, including the US, Europe and Middle East."

He said companies from the retail, industrial, electronics and chemicals sectors have all shown a strong interest in the program.

The bank has already started helping customers to access the program on a case by case basis. Citibank China has initiated four transactions under the guidance of the People's Bank of China's Shanghai office.

The Ministry of Commerce last month released a draft regulation on yuan-backed FDI to solicit public comment and has said it hopes to have rules in place as early as this month.

He said: "It is a natural step to see the rise of the local currency with China's rising economic clout in the world."

China started to allow cross-border trade yuan settlement on a trial basis in Shanghai and four Guangdong Province cities, expanded the program to 20 provinces and municipalities last year, and countrywide last month.

FDI in China may exceed US$100 billion again this year, according to the Ministry of Commerce.