Chinese yuan use up 21.1% in cross-border trade as Beijing pushes global role for currency

China’s central bank vows to support Shanghai and Hong Kong as finance centres as it takes ‘next step’ in internationalisation of the yuan

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China’s yuan ranks fourth among top global payment currencies. Photo: Reuters

Published: 5:00pm, 6 Oct 2024

Use of the Chinese currency for cross-border trade rose by more than a fifth in the first eight months as Beijing pushed for the yuan to play a bigger role in global business.

According to the People’s Bank of China, total cross-border yuan payments and receipts increased 21.1 per cent year on year to 41.6 trillion yuan (US$5.9 trillion) between January and August.

Cross-border yuan payments and receipts for trade in goods from January to August accounted for 26.5 per cent of total settlements, including foreign currencies, the central bank said in a report posted on its website last week.

According to the report, the Society for Worldwide Interbank Financial Telecommunication (Swift), the world’s largest interbank messaging service, said the yuan’s share of global transactions was 4.69 per cent in August – a slight drop from 4.74 per cent in July.

But it was the 10th consecutive month above 4 per cent for the Chinese currency, which also retained its fourth-place spot among payment currencies.

The US dollar is the dominant invoicing, investment, and reserve currency in the international monetary system.

Greater use of the yuan in global trade is seen as a way for China to increase its political influence.