The share of the Chinese currency, yuan, in trade payments with China has increased from 13 percent in 2017 to 30 percent currently. Cross-border yuan transactions linked to China have surged from 9 trillion yuan in 2017 to 64 trillion yuan now. In line with its strategy to reduce dependence on the US dollar, China is boosting the use of yuan in global payments and foreign currency reserves.
The use of the Chinese currency yuan (RMB) in trade payments with China has grown rapidly. According to research by Goldman Sachs, recently reported by the South China Morning Post, yuan’s share in trade payments related to China was only 13 percent in 2017. It has now risen to 30 percent.
However, analysts remain unsatisfied. They argue that despite China’s growing influence in the global economy, the yuan’s international identification is still incomplete. Alongside trade expansion, the potential for growth has significantly increased total cross-border yuan transactions. Yet, yuan’s share in worldwide payments remains around only 3 to 4 percent.
Nonetheless, this growth in yuan usage highlights a key strategy of Beijing. Former central bankers and financial analysts have expressed a brighter future for the yuan. They predict increased use of yuan in industrial supply chains, commodity purchase payments, and currency swap mechanisms.
