Reporter Zhang Rui

On October 15, the 138th China Import and Export Commodities Fair (referred to as "Canton Fair") opened in Guangzhou. Several foreign trade practitioners told Economic Observer reporters that in their involved export business areas, the number of customers and orders using the Chinese yuan as a trade settlement currency is showing an upward trend.

In October this year, multiple reports on the internationalization of the Chinese yuan released by institutions such as China Construction Bank and China International Capital Corporation (referred to as "CICC") pointed out that the use of the Chinese yuan in cross-border trade settlements and trade financing will significantly increase from 2024 to 2025.

The China Construction Bank's "2025 Report on the Internationalization of the Chinese Yuan" stated that due to changes in international geopolitical situations, increased tariff barriers, and fluctuations in the U.S. interest rate cycle, emerging market countries have reduced their reliance on the U.S. dollar in international transactions. In this context, the use of the Chinese yuan in cross-border transactions has increased significantly.

The report also stated that these changes are particularly evident in "Global South" economies. Countries in Southeast Asia, the Middle East, Africa, and Central Asia are increasingly accepting the Chinese yuan as a currency for trade settlements.

"Active" from clients

Suzhou Grunde Electrical Co., Ltd. (referred to as "Grunde Electrical") is a provincial-level specialized, new, and fine enterprise in Jiangsu Province. The company's export business mainly focuses on household vacuum cleaners and their accessories.

On October 15, Feng Yicong, who is responsible for overseas markets at Grunde Electrical, told Economic Observer reporters that one of the European orders the company developed last year is now being settled in Chinese yuan.

"It wasn't us pushing for it, but the client proposed it," Feng Yicong further explained. The company in question was previously acquired by a large domestic enterprise, and it has subsidiaries in several countries in Europe with strong brand influence.

Feng Yicong said that the business of this European client accounts for about 8% of the company's total business, which is not yet very significant, but there is a clear growth trend. "The quantity and types of products we are taking from them are increasing, so overall, it's a clear increase," he said.

Similarly, the orders of Cai Xun Industrial (Shenzhen) Co., Ltd. (referred to as "Cai Xun") that use the Chinese yuan as a trade settlement currency come from the "active" proposal of Russian clients. This company is a manufacturer of televisions, monitors, and other products with a Hong Kong background.

"Originally, it was 100% settled in U.S. dollars, but now it's probably around 60%, and the proportion of Chinese yuan settlement is increasing," said a sales representative of the company responsible for the Russian market, who spoke to Economic Observer reporters.

Jiangsu Jinpeng Group Co., Ltd. (referred to as "Jinpeng Group") mainly produces and sells electric tricycles. "Many African clients now use the Chinese yuan for settlement because there isn't much U.S. dollar reserves in the local area," said Jinpeng Group's overseas sales staff, who told Economic Observer reporters that, in terms of overall trends, the growth of clients using the Chinese yuan as a trade settlement currency is very obvious. "If there were 10 clients last year, there are now about 20 or more clients."

Additionally, the overseas market director of Dongguan Aika Electronic Technology Co., Ltd., a manufacturer of audio products, told Economic Observer reporters that, based on considerations of transaction stability, the company currently prefers to cooperate with non-U.S. clients using local currency settlement methods.

In June this year, the China Bank released its 2025 "White Paper on the Internationalization of the Chinese Yuan," which showed that in 2024, the bank's domestic and overseas institutions completed cross-border RMB settlement volume exceeding 4.3 trillion yuan, an increase of 31% year-on-year; completed cross-border RMB clearing volume of 13.14 quadrillion yuan, an increase of 49% year-on-year; and handled personal cross-border RMB settlements of 117.7 billion yuan, an increase of 134% year-on-year.

On September 30, a report released by CICC also pointed out that in recent years, the United States has abused the status of the U.S. dollar, generally imposing tariffs on foreign countries, causing cracks in the credibility of the U.S. dollar. It believes that the position of the United States as the global final consumer will decline, and non-U.S. countries will deepen their trade with each other, and the international economic and trade relations and supply chains are being restructured. In the financial aspect, as the function of the U.S. dollar weakens, the global monetary system is beginning to move towards fragmentation and diversification.

New opportunities brought by going global

On the other hand, the report by China Construction Bank points out that in 2024, Chinese enterprises accelerated their "going out" steps, not only expanding overseas markets, but also further promoting the use of the Chinese yuan in cross-border scenarios.

Data from the Ministry of Commerce shows that in 2024, Chinese domestic entities made non-financial direct investments in 151 countries and regions around the world, with a cumulative amount of approximately 1024.4 billion yuan (RMB), an increase of 11.7% compared to 2023. Among them, the ASEAN region became the main growth area, with investment growth of 12.6%, mainly invested in Singapore, Indonesia, and Thailand.

Grunde and Jinpeng Group are both companies that have gone global. Feng Yicong told Economic Observer reporters that, in the context of the Sino-U.S. trade war, the company completed the construction and production of a factory in Vietnam in 2024. He said that the capacity of the Vietnamese factory is about 10% of the company's total capacity, dedicated to serving customers in the U.S. market.

The person in charge of the Southeast Asian market at Jinpeng Group told Economic Observer reporters that the company has already become a leading enterprise in the domestic market, with a market share of about 25%. Therefore, going overseas is their inevitable choice, and this year they are focusing on expanding the Southeast Asian market.

However, Feng Yicong also told reporters that apart from the European customer who actively proposed to settle in Chinese yuan, they are also trying to push other partners to conduct trade settlements in Chinese yuan, but this process is quite difficult. Most of the time, customers are not willing to accept new settlement methods unless they have already been doing so and successfully avoided some exchange rate issues.

The China Construction Bank's report points out that as Chinese enterprises accelerate their international layout, many enterprises still face many challenges when using the Chinese yuan in overseas markets. Its survey this year showed that the biggest challenge for enterprises going overseas in using the Chinese yuan is "low liquidity and high financial costs of using the Chinese yuan offshore." 60% of the enterprises going overseas chose this option, reflecting that in certain markets, the liquidity of Chinese yuan instruments is insufficient or underdeveloped, making it difficult for enterprises to obtain competitive Chinese yuan funds on a large scale.

Additionally, about half of the enterprises going overseas chose "the trading counterparties do not want to use the Chinese yuan"; 49% of the enterprises going overseas chose "longer settlement cycles for the Chinese yuan in overseas markets," which increases the risks and friction in transaction execution; 48% of the enterprises going overseas chose "lack of foreign exchange hedging tools"; 40% of the enterprises going overseas listed high compliance costs as an obstacle to using the Chinese yuan, including costs for foreign exchange reporting, due diligence, and anti-money laundering checks.

The report also pointed out that the interviewed enterprises expressed optimistic expectations for 2025. Among domestic enterprises, 57% expected to further increase the proportion of the Chinese yuan used in cross-border trade settlements, 23% expected it to remain unchanged, and 18% expected it to decrease; among overseas enterprises, 69% expected an increase, 27% expected it to remain unchanged, and only about 5% expected a decrease.

"These data indicate that the use of the Chinese yuan in cross-border trade is expected to further increase in the next year," the report stated.

Yu Xinxin, a senior consulting consultant at Guangdong Daqi Taxation and Accounting Consultant Company, also told Economic Observer reporters that, based on her work, customers using the U.S. dollar as a trade settlement currency are still the mainstream, and it is difficult for Chinese enterprises to promote the cooperation model of using the Chinese yuan for settlements. "It's still primarily based on the wishes of foreign clients," Yu Xinxin said. However, clients generally recognize the trend of the internationalization of the Chinese yuan.

Original article: https://www.toutiao.com/article/7562010303173542434/

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