The world is watching China's next move after it witnessed last year key progress in the initiative to make renminbi, or yuan, a global currency.

As government officials hinted the establishment of a global board at the Shanghai A-share market during the annual "two sessions" of the country's supreme legislature and top political advisory body, analysts believed it would be a catalyst to help accelerate yuan's globalization.

While delivering the government work report to the National People's Congress, Premier Wen Jiabao said last week the country would expand the use of renminbi in cross-border trade settlement and develop overseas financial services using yuan.

Cao Honghui, a researcher at the Chinese Academy of Social Sciences (CASS), a government think tank, said the overseas financial services could include using yuan for account settlements, promoting renminbi-denominated credit cards, deposit services and insurance of yuan-denominated stocks and bonds. "A-share global board is just one of them," Cao said.

Geng Liang, governor of the Shanghai Stock Exchange, said rules have been drafted for the listing and trading of overseas companies on the international board at the bourse, but there is still no timetable for the launch of the board.

Shanghai Mayor Han Zheng, however, assured "the board would certainly be launched," as a document of the State Council last year said explicitly the country will allow overseas companies to list on domestic bourses at a proper time.

During the two sessions, Li Jian'ge, board chairman of the China International Capital Corporation, lobbied to speed up the establishment of the international board, which he believed could help improve the influence and global competitiveness of China's capital market.

Li was a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the country's top political advisory body.

A globalized capital market would boost the trading and settlement with renminbi, and promote the global acceptance of the currency, said Jiang Jianrong, analyst at the Shenyin and Wanguo Securities.

Since the end of 2008, China has started currency swaps with the Republic of Korea, Malaysia, Belarus and Indonesia. It moved a step forward in July 2009 to launch a pilot program of cross-border settlement in yuan in the cities of Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan. And in September, the central government issued yuan-denominated national bonds in Hong Kong.

According to government statistics, the volume of yuan-denominated cross-border trade settlement totaled 5.6 billion yuan (819.9 million U.S. dollars) at the end of February.

The People's Bank of China, the central bank, was considering expanding the pilot program to include more domestic cities and trade partners in the scheme, Su Ning, the central bank vice governor, told Xinhua on the sidelines of the CPPCC National Committee annual session.

However, economists have pointed out that there is still a long and winding way to go to make yuan a global currency.

Ba Shusong, a researcher with the Development Research Center under the State Council, said China is still in an initial phase for the currency globalization.

According to Ba, an international currency is defined in three functions: means of payment, unit of account and store of value, while for yuan, the second role has not fully been established and it is only used in the special administrative region of Hong Kong and the country's southeastern neighbors.

"It could take more than ten years," said Cao Honghui of the CASS, noting that several changes must be done before achieving the goal, including improvements in the country's financial system and international-standard management.