China steps up its push for the yuan in international trade
In recent months, Beijing has openly and systematically increased pressure for the Chinese yuan, or renminbi, to be used more often in international payments, trade, lending, and investment. This is a long-term project that is not new, but in 2025 and at the start of 2026 it has once again come to the forefront because of a combination of political, trade, and financial reasons. In doing so, the Chinese authorities are not hiding their ambition to reduce dependence on the US dollar in transactions relating to Chinese goods, Chinese banks, and Chinese partners, especially in Asia, the Middle East, Africa, and part of Europe. Although the yuan is still nowhere near challenging the dollar’s global dominance, the changes now visible are serious enough that international banks, exporters, and investors can no longer treat them as a side story.
The essence of the whole process is not only symbolism, but a very practical question: in which currency transactions will be concluded and settled. When part of trade, financing, or insurance begins shifting from the dollar to the yuan, conversion costs, currency risks, the way companies borrow, and even the geopolitical exposure of states and companies change. That is precisely why analysts today discuss less whether the yuan will “replace the dollar,” and more where it is slowly gaining ground in areas where it previously had almost no role. In practice, this is a gradual shifting of boundaries, not a sudden reversal of the world monetary order.
What China is specifically pushing now
In February 2025, the Chinese central bank officially stated that it wanted to more strongly promote the use of the renminbi in cross-border payments, pricing, investment, and financing. In this way, Beijing once again made it clear that the international role of the yuan is not just a market process, but also an explicit state priority. In addition, the authorities want to strengthen the offshore yuan market, expand the network of renminbi clearing banks, rely on bilateral currency swap arrangements, and further consolidate the role of Shanghai and Hong Kong as financial hubs through which the Chinese currency spreads in international transactions.
Such a strategy has several parallel tracks. The first is trade in goods and services, where China wants more exporters and importers to agree invoices directly in yuan. The second is financing, that is, the use of the yuan in loans, bonds, and trade finance. The third is payment infrastructure, above all the development of CIPS, China’s cross-border interbank network for renminbi payment settlement. The fourth is political-financial security: the larger the share of transactions in the domestic currency, the lower the exposure of Chinese companies, but also of Chinese partners, to US sanctions, the dollarized financial system, and the costs imposed by the dominant use of the dollar.
It is precisely this combination of economic and security motives that explains why the topic has once again moved to the forefront. After years in which the international role of the yuan grew slowly and unevenly, Beijing is clearly assessing that the moment has come in which more ground can be gained, even without full liberalization of the capital account and without full currency convertibility. In other words, China is trying to expand the international use of the yuan selectively and pragmatically, where it brings the greatest benefit, without opening up the entire financial system more than it wants.
The numbers show progress, but also limits
Official Chinese and international data confirm that the yuan has strengthened in several important segments in the recent period, but it still lags behind the dollar and the euro when the overall picture of global finance is considered. According to SWIFT data from April 2025, relating to March 2025, the renminbi accounted for 4.13 percent of global payments by value and at that time was the fourth most active currency in the world. By the summer of 2025, its share had weakened, so in June it remained at 2.88 percent and fell to sixth place, only to strengthen again in September 2025 to 3.17 percent and return to fifth position. These shifts show that progress is not linear and that the international use of the yuan depends on market conditions, investor sentiment, trade flows, and available liquidity outside China.
At the same time, SWIFT and the Chinese central bank state that the renminbi in 2024 was among the leading currencies in trade finance. In February 2025, the Chinese authorities pointed out that by the end of 2024 the yuan was the fourth currency in global payments and the third in global trade financing. This is important because the international status of a currency is not measured only by its share in classic payment messages, but also by how much it is used in financing shipments, issuing letters of credit, pricing raw materials, and lending to companies involved in foreign trade. Where companies seek lower cost and faster settlement, the yuan has a greater opportunity than in the area of global reserves, which remain slower and more conservative.
The limits of China’s breakthrough are even clearer in central bank reserves. Data from the IMF’s COFER database show that the renminbi has been separately included in the statistics of world foreign exchange reserves only since the end of 2016, and its share is still measured at only a few percent. This means that the yuan has managed to enter the circle of reserve currencies, but it has not become a key anchor currency of the international system. For central banks, market depth, full liquidity, regulatory predictability, and the ability to exit positions quickly remain crucial, and these are precisely the areas in which the dollar still has an enormous advantage.
A similar picture can also be seen in the foreign exchange market. The Bank for International Settlements announced that in April 2025, trading in the global OTC foreign exchange market reached 9.6 trillion dollars per day, and the Chinese renminbi was on one side of 8.5 percent of all transactions, more than in 2022. This is noticeable progress and confirmation that the yuan has become more important in day-to-day financial flows than it was a few years ago. However, the same data show how dominant the dollar still is: the US currency participated in 89.2 percent of all trades, which says enough about the difference between the yuan’s growing presence and the dollar’s actual monetary power.
Why companies accept settlement in yuan at all
Companies rarely change their settlement currency out of political loyalty. As a rule, they do so because they see in it a lower cost, lower currency risk, or easier access to financing. China’s strategy is therefore aimed not only at states, but also at the concrete business decisions of companies. If a Chinese exporter and a foreign buyer can contract goods directly in yuan, they avoid additional conversions through the dollar and part of the cost of hedging against exchange-rate changes. If a bank in Hong Kong, Singapore, or the Middle East has sufficient renminbi liquidity, it can offer a client faster or cheaper closing of a transaction. If a supply chain is strongly tied to China, it is logical that interest in settlement in the Chinese currency also grows.
This opens space for a gradual but important change in international business. The whole system does not have to change for the effect to be large. It is enough for part of the trade in energy products, industrial goods, electronic components, machinery, or infrastructure projects to shift to the yuan in order to create a new habit and new financial infrastructure. Once companies introduce invoices, credit lines, hedging, and settlement in a new currency, a return to the old model is no longer automatic.
That is why Beijing especially insists on linking trade and finance. It is not enough for goods to be invoiced in yuan if there are not enough credit instruments, liquidity, and protection mechanisms for that currency. This is precisely why China is simultaneously encouraging offshore markets, expanding the availability of yuan-denominated bonds, supporting clearing banks, and trying to increase the number of foreign financial institutions that can process such transactions directly.
CIPS and financial infrastructure as a key tool
One of the most important pillars of China’s plan is CIPS, the Cross-Border Interbank Payment System, the system through which cross-border payments in renminbi are settled. This system is often described as a Chinese alternative to Western-dominant infrastructure, although reality is not that simple. CIPS is not a complete replacement for SWIFT, but above all a specific network and operational channel for yuan transactions that is expanding alongside existing global payment frameworks. But its importance is growing because it reduces dependence on other people’s channels, gives Beijing a greater degree of control, and makes settlement in yuan more practical for banks and companies.
According to data published on the official CIPS website, on 11 March 2026 the system had 193 direct and 1573 indirect participants, while the annual business volume in 2025 reached 180 trillion yuan. That figure alone shows that this is not experimental infrastructure, but a network that has entered a serious growth phase. Even more important is the fact that the participants are not concentrated only in mainland China: they are present in Asia, Europe, Africa, North and South America, and Oceania, showing that the Chinese currency is gaining an ever broader operational base for international transactions.
For banks and multinational companies, infrastructure is often more important than political declarations. If a system operates reliably, offers enough participants, and allows faster transaction processing, it is easier to accept a new currency in everyday business. In that sense, CIPS is not just a technical tool, but also a market signal: China is ready to invest in institutions that are supposed to accompany the spread of the yuan beyond its borders.
Hong Kong remains the main stronghold, but the network is expanding
Although Beijing speaks of the global role of the renminbi, the real center of offshore business is still Hong Kong. A large part of the liquidity, clearing capacity, and financial products linked to the yuan is concentrated there. Data highlighted by the Hong Kong authorities and its monetary authority show that the city still holds the world’s largest offshore renminbi pool and the largest offshore market for foreign exchange and derivatives linked to that currency. In practice, this means that a large part of the yuan’s international expansion passes precisely through Hong Kong, which serves as a bridge between the Chinese mainland and global financial flows.
That role is not only historical, but also actively being upgraded. During 2025, the Hong Kong Monetary Authority emphasized the need to strengthen RMB liquidity and instruments, while in September 2025 it reported strong growth in the ratio of RMB loans to deposits in the banking system. The logic in the background is clear: if the market wants more yuan in real business, there must be greater capacity for short-term and medium-term financing in that currency. Hong Kong therefore serves not only as a place of settlement, but also as a laboratory for developing products that should make the yuan more usable for international companies.
At the same time, the network does not stop at Hong Kong. In recent years, the Chinese authorities have been expanding clearing arrangements, bilateral swap lines, and institutional ties with partners in Europe, Asia, and other regions. The European Central Bank and the People’s Bank of China in September 2025 extended their bilateral swap arrangement until October 2028, with an unchanged maximum amount of 350 billion yuan and 45 billion euros. Such mechanisms by themselves do not mean that European companies will switch massively to the yuan, but they serve as a liquidity safety net and confirm that the international infrastructure for that currency is gradually gaining a more serious institutional foundation.
Swap lines and the political economy of the yuan
Currency swap agreements are one of the less visible, but strategically important levers of Chinese policy. According to data from the People’s Bank of China, as of 31 May 2025 the PBOC had bilateral swap arrangements with the monetary authorities of 32 countries and regions, and the outstanding amount of drawn renminbi stood at 81.8 billion yuan. Such agreements enable partners to access yuan liquidity if needed and facilitate trade, financing, and financial stability in relations with China.
In political terms, this is an important tool. Swap lines serve not only for technical liquidity management, but also for deepening economic ties and creating a kind of monetary zone of influence. Countries that trade more strongly with China or rely on Chinese infrastructure financing have a greater incentive to accept the yuan in at least part of their transactions. This does not necessarily mean geopolitical alignment, but it does mean creating an additional financial option outside the dollar.
That is precisely why the debate on the international role of the renminbi cannot be reduced only to economic technique. It is connected to the question of how monetarily multipolar the world will become in the coming years. The dollar still remains by far the most important world currency, but China is clearly trying to build a system in which its economy will have more room to operate outside full dependence on the US currency and the infrastructure that Washington can use politically, directly or indirectly.
The biggest obstacle is still China’s controls
Despite growth, the yuan still runs into serious structural constraints. The biggest problem is not the lack of political will in Beijing, but the fact that China still does not want to fully open the capital account or leave its currency to a completely free market regime. For international investors and central banks, this is a key issue. A global reserve currency must be easily accessible, easily exchangeable, supported by deep and transparent financial markets, and protected by a relatively predictable institutional framework. China is advancing in some of these areas, but it is still not ready to do everything that would be necessary for the yuan to become a currency in the same category as the dollar.
This is also the fundamental tension of China’s strategy. Beijing wants greater international use of the yuan, but without complete liberalization that could limit domestic control over the exchange rate, capital flows, and financial stability. That is why the yuan is advancing selectively: it penetrates trade more easily, partly financing, and gradually payment infrastructure, but much more slowly reserves, global borrowing, and the private portfolios of international investors. This difference between trade usability and full global financial attractiveness will probably mark the next phase of the process as well.
Because of this, it is more realistic to speak of an expansion of space for the yuan than of an imminent collapse of dollar dominance. The dollar is still deeply rooted in foreign exchange trading, reserves, cross-border lending, and the pricing of key commodities. But that does not mean China cannot achieve significant success. If it succeeds in increasing the share of the yuan in trade with its own partners, in infrastructure projects, regional financing, and part of the bond market, it will already thereby significantly reduce the sensitivity of its economy to external pressures.
What this change means for the world economy
For international business, the most important fact is that before the market’s eyes a system with more currency options than before is slowly taking shape. Companies doing business with China will increasingly have to assess whether invoicing in yuan pays off for them, banks will expand the offer of products linked to the renminbi, and states with stronger trade and financial ties with Beijing will seek greater room for maneuver between the dollar, the euro, and the Chinese currency. This does not mean the end of the dollar era, but it does mean a greater number of situations in which the dollar will no longer be the only natural choice.
For Europe, this change is relevant for both trade and financial reasons. China’s push for the yuan does not necessarily have to lead to a frontal conflict with the existing system; it may mean the gradual creation of parallel channels and greater flexibility in international settlement. In such an environment, European banks, exporters, and regulatory institutions will have to follow not only political messages from Beijing, but also very concrete market signals: where liquidity is growing, which goods are increasingly being settled in renminbi, how fast the CIPS network is growing, and what role Hong Kong retains in all this.
In other words, the future of the yuan will not be decided in one major announcement, but in a series of seemingly technical decisions made by companies, banks, and central banks. The Chinese currency may not overtake the dollar soon, but even smaller shifts can already change the patterns of international business. That is why the question of the renminbi matters not only as a geopolitical issue, but also as a very concrete business question: who will in the future pay, borrow, and trade in which currency.
Sources:- People's Bank of China / Xinhua – announcement on encouraging the cross-border use of the renminbi in payments, pricing, investment, and financing (link)
- SWIFT RMB Tracker, April 2025 – renminbi share in global payments for March 2025 (link)
- SWIFT RMB Tracker, October 2025 – data for September 2025, including the renminbi’s share in global payments (link)
- Bank for International Settlements – preliminary results of the Triennial Foreign Exchange Survey for April 2025 (link)
- IMF COFER – database on the currency composition of official foreign exchange reserves and methodological notes (link)
- CIPS – official data on the number of participants and annual business volume of the yuan cross-border payment settlement system (link)
- Hong Kong Monetary Authority – overview of measures and market indicators supporting Hong Kong’s role as an offshore RMB center (link)
- European Central Bank – extension of the bilateral euro-renminbi swap arrangement with the People’s Bank of China (link)
- People's Bank of China – overview of bilateral currency swap agreements signed with 32 countries and regions (link)
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