How a global payment system cashes in on the yuan’s increased use – learn Chinese

As China globalises its economy, builds itself an international financial centre and internationalises the yuan, one obstacle has steadfastly stood in the way: the Chinese language.

The limited use in global finance and business of the language because of its complexity, said analysts, would have hindered Beijing’s efforts to increase the use of the yuan in global payments and transactions.

That may change as global financial messaging provider Society for Worldwide Interbank Financial Telecommunication (SWIFT) localises its technologies to support the Chinese language, a move to draw more mainland Chinese institutions into its network and help them converge with international market practices.

“China’s lack of a [internationally] compatible set of nationwide branch codes and the use of Chinese characters are problems in international finance,” said David Blair, managing director of Singapore-based treasury consulting firm, Acarate Consulting.

“There needs to be an easier way for foreigners to make payments in yuan to their Chinese suppliers across the country.”

The use of the yuan has dwindled in the past few years. But amid the intensifying US-China trade war, Beijing has accelerated the opening up of its domestic markets to allow foreign investment in yuan-denominated asset classes even as the Chinese currency slid against the US dollar.