China’s yuan seen as ‘new choice’ for RCEP, may match pound and yen in 10 years, report says

Bank of China report says more than 90 per cent of domestic and foreign firms believe ‘strongly’ using yuan could steady trade within Asia-Pacific region

Lu Lei, deputy director of the State Administration of Foreign Exchange, also pledged to create more application scenarios for the yuan during China’s opening-up

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China has been treading cautiously when it comes to further increasing the global use of the yuan, which is yet to be fully convertible. Photo: Reuters

Published: 11:00pm, 7 Jun 2023Updated: 11:58pm, 7 Jun 2023

China should further capture growing interests in using the yuan through regional trade pact and offshore trading centres, according to a Bank of China report, as Beijing presses on to increase global use for the currency in an “orderly” manner.

Members of the 15-nation Regional Comprehensive Economic Partnership (RCEP) accounted for 18.9 per cent of yuan-denominated remittances in China last year, compared with 15.9 per cent in 2021 and just 7.1 per cent in 2020, according to the bank’s 2022 yuan internationalisation white paper, released on Tuesday.

There is also strong intention to expand the cross-border use of yuan in the China-backed RCEP that involves the 10 members of the Association of Southeast Asian Nations (Asean), plus China, South Korea, New Zealand, Australia and Japan, it added.

More than 90 per cent of domestic and foreign companies said they believe “strongly” using the yuan in cross-border payments could steady in the Asia-Pacific region when the liquidity among major currencies takes a hit, according to the state-owned bank’s survey.

In 2022 … the attractiveness of yuan financing to overseas market players rose

Bank of China report