China's central banks, the People's Bank of China, has approved a pilot initiative allowing companies registered in economic development zones in Xinjiang Uygur Autonomous Region to borrow renminbi (RMB) from overseas institutions.

The measure will enable businesses in Kashgar and Horgos to borrow RMB loans from foreign institutional and private lenders to finance projects – specifically production and construction projects – in southern Xinjiang, including in the prefectures of Kashgar, Hotan, Kizilsu and Aksu.

Xinjiang is seeing a boom in e-commerce and is developing its international trade, following the implementation of the Silk Road Economic Belt initiative, according to China.org.cn. 

The initiative is part of the Beijing's One Belt, One Road economic development framework, which aims to integrate trade and investment in central Asia.

The move comes just two weeks after reports surfaced that China had taken steps to limit cross-border yuan trading by several foreign banks until the end of Q1 2016.

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CTMFile take: China is set on pushing forward its international trade, but this is set against a very uncertain backdrop of stock market falls, possible yuan devaluation and attempts by the central bank to curb any threats to yuan FX volatility.