Report on the Internationalization of the Renminbi (RMB) in 2023

The People’s Bank of China, guided by Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era since 2022, has diligently implemented the decisions of the Party Central Committee and the State Council. Adhering to the general working principle of seeking progress while maintaining stability, and emphasizing reform, openness, mutual benefit, and coordinated development, the internationalization of the Renminbi (RMB) has been steadily advancing, presenting a series of new developments and changes.

Key Highlights:

  1. Enhanced Capability in Serving the Real Economy through Cross-Border RMB Transactions:
    • The foundational system for cross-border RMB transactions has been further improved, and the coordination between domestic and foreign currency policies has strengthened.
    • In 2022, the total amount of RMB cross-border payments and receipts handled by banks reached ¥42.1 trillion, marking a YoY growth of 15.1%.
    • RMB cross-border payments for goods trade accounted for 18.2% of the total cross-border payments and receipts during the same period.
    • From January to September 2023, the total amount of RMB cross-border payments and receipts was ¥38.9 trillion, with a YoY growth of 24%. The proportion of RMB cross-border payments for goods trade increased to 24.4%, a 7-percentage point YoY increase, reaching the highest level in recent years.
  2. Elevated Functionality of RMB Financing Currency:
    • Policies facilitating domestic banks’ overseas loans and foreign institutions’ domestic bond issuances have been successively introduced, leading to continuous improvements in the RMB investment and financing environment.
    • As of the end of 2022, the Bank for International Settlements (BIS) reported that the stock of international RMB debt securities amounted to $173.3 billion, rising to the 7th position, a 2-position YoY increase.
    • According to SWIFT data, by the end of 2022, RMB accounted for 3.91% of global trade finance, up 1.9 percentage points YoY, ranking third.
    • As of September 2023, RMB’s share in global trade finance increased to 5.8%, a 1.6-percentage point YoY increase, moving up to the second position.
  3. Increased Activity in Offshore RMB Market Transactions:
    • In 2022, the People’s Bank of China and the Hong Kong Monetary Authority signed a standby swap agreement, expanding the scale of fund swaps, further deepening financial cooperation between the mainland and Hong Kong.
    • New RMB clearing banks were established in Laos, Kazakhstan, Pakistan, and Brazil, optimizing the overseas RMB clearing network.
    • At the end of 2022, the balance of RMB deposits in major offshore markets reached approximately ¥1.5 trillion, returning to historical highs.
    • According to a 2022 survey by the BIS, the share of RMB foreign exchange transactions in global markets increased from 4.3% to 7% in the past three years, rising from the eighth to the fifth position.

Future Outlook: The People’s Bank of China, guided by Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era, will continue to implement the decisions of the 20th Party Congress. The focus will be on facilitating trade and investment, further improving the system and infrastructure arrangements for RMB cross-border investment, financing, and transaction settlement. The bank will accelerate the transformation of the financial market towards institutional openness, create a more friendly and convenient investment environment, deepen bilateral currency cooperation, support the healthy development of offshore RMB markets, and promote a positive cycle between onshore and offshore RMB markets. Simultaneously, efforts will be made to strengthen the macro-prudential management framework for integrated cross-border fund flows in local and foreign currencies, enhance risk prevention and control capabilities under open conditions, and ensure the bottom line against systemic risks.