February 20, China should push for the use of its currency, the yuan, to settle oil trade from central Asia, the Middle East and Russia, according to Cao Tong, senior vice president of state-run CITIC Bank.

In comments published in the Financial News, a newspaper run by China's central bank, Cao said using the yuan for pricing and settling oil trade with these major oil producing countries would be a "second front" in the internationalization of China's currency.

China has inked bilateral currency swap deals with the United Arab Emirates, Kazakhstan and Uzbekistan worth billions of dollars, giving these countries a credit line to obtain yuan from China and boosting economic and political ties between China and the resource rich Central Asian and Gulf nations.

According to previous Chinese media reports, China has also discussed using the yuan to settle bilateral trade with Iran, its third-biggest source of oil imports.

Late last week the country's largest oil importer, China International United Petroleum & Chemical Co. Ltd., renewed a deal with National Iranian Oil Co. under which China will increase imports to half a million barrels per day.

In its efforts to make the yuan a global currency, Beijing has allowed the development of an offshore market in Hong Kong, and is looking to locate similar trade in London, which sits in the middle of time zones between Asia and the U.S.