During the 14th Five-Year Plan period, the People's Bank of China (PBOC) is further deepening financial reforms and high-level opening up, cautiously and orderly advancing the internationalization of the Renminbi (RMB). The central bank aims to enhance the quality and level of RMB internationalization, promoting wider use of RMB in cross-border transactions, ultimately boosting its international status and global influence. Recently, an interview with the head of the Macro-Prudential Management Bureau of the PBOC provided in-depth insights into the progress and achievements made towards RMB internationalization.
Reporter: Can you elaborate on the PBOC's achievements in promoting the cross-border and international use of the RMB during the 14th Five-Year Plan?
Head of Macro-Prudential Management Bureau: The 14th Five-Year Plan outlines that we should "cautiously advance the internationalization of the RMB, adhere to market-driven processes and enterprise choices, and create a new type of mutually beneficial cooperation based on the free use of RMB." Following the directives of the central government and under the principles of market-driven and mutually beneficial cooperation, the PBOC aims to facilitate cross-border transactions and improve access to various currencies for economic entities. On September 22, during a press conference about the high-quality fulfillment of the 14th Five-Year Plan, Governor Pan Gongsheng emphasized that "over a longer time frame, the steady rise of the RMB's international status is a significant characteristic of the changes in the international monetary system over the past two decades." Currently, the RMB has become the largest currency for China’s foreign payments and receipts, the second-largest currency for global trade financing, and the third-largest payment currency, with a weight ranking third in the International Monetary Fund (IMF) Special Drawing Rights (SDR) currency basket. The achievements can be summarized as follows:
Firstly, there has been a significant increase in RMB cross-border trade and investment financing, enhancing the effectiveness of support for the real economy. Continuous improvement of the policy framework and deepening of high-level pilot programs for trade and investment facilitation have begun to show the network effects of RMB use internationally. In the first half of 2025, the total amount of RMB cross-border payments and receipts reached 35 trillion yuan, a year-on-year increase of 14%. Among this, the total amount of RMB cross-border payments for goods trade was 6.4 trillion yuan, accounting for 28% of the total cross-border payments in the same period. Both the volume and proportion were at historical highs. With the increased flexibility in exchange rates, more companies are willing to use RMB for cross-border settlements to avoid exchange rate risks and reduce financial costs.
Secondly, China’s financial markets are steadily opening up, and the offshore RMB market is developing healthily, significantly increasing the global attractiveness of RMB assets. Currently, foreign entities hold over 10 trillion yuan worth of domestic RMB financial assets, with central banks or monetary authorities from over 80 countries and regions incorporating RMB into their foreign exchange reserves. RMB bonds and stocks have been included in major global asset trading indices. The mutual accessibility of financial markets between the mainland and Hong Kong continues to deepen, with Hong Kong emerging as a key hub for offshore RMB activities. London, Singapore, and Dubai have each developed distinctive offshore RMB markets, with RMB deposits in major offshore markets reaching 1.6 trillion yuan and outstanding offshore RMB bonds and Panda bonds issued by foreign institutions totaling about 2 trillion yuan.
Thirdly, the global payment and clearing network for RMB is gradually being perfected, making the RMB increasingly accessible. After years of development, the PBOC has established a multi-channel, widely covering RMB cross-border payment and clearing network, which includes the Cross-Border Interbank Payment System (CIPS), intra-bank cross-border systems of commercial banks, and the cross-border retail payment networks constructed by institutions like China UnionPay, WeChat Pay, and Alipay. Currently, CIPS has connected with 1,729 participants, covering 5,000 banking institutions across 189 countries and regions on six continents. The cross-border transactions using the digital RMB and the interconnectivity of domestic and international fast payment systems and QR codes are advancing steadily, improving the efficiency of cross-border payments. The RMB clearing network is also accelerating its layout with authorized clearing banks in 33 countries or regions, covering major international financial centers.
Fourthly, international monetary and financial cooperation has deepened comprehensively, with the RMB playing a significant role in the global financial stability system. On a global level, the RMB was included in the SDR currency basket, holding a weight of 12.28%, ranking after the US dollar and euro. On a regional level, new arrangements for rapid financing tools funded by freely usable currencies like the RMB have recently been established under the Chiang Mai Initiative Multilateralization framework, further strengthening the regional financial safety net. On a bilateral level, the PBOC has signed effective bilateral currency swap agreements with 32 central banks or monetary authorities, covering key economies in major regions across all six continents, with a scale of about 4.5 trillion yuan.
Reporter: In recent years, the PBOC has increased the scale and scope of currency swaps with other central banks. What role do these swaps play?
Head of Macro-Prudential Management Bureau: Central bank currency swaps are a primary method of cooperation among central banks internationally. On the basis of mutual trust and certain conditions, two central banks can exchange their own currencies and later revert to the original currency at maturity, essentially forming a secured financing arrangement. Currently, the PBOC has signed effective swap agreements with the European Central Bank and the central banks or monetary authorities of New Zealand, South Korea, Indonesia, Brazil, and Saudi Arabia, totaling 32 agreements that essentially cover major economies in key regions around the globe, amounting to approximately 4.5 trillion yuan.
From both global and Chinese perspectives, currency swaps perform three main functions. First, they provide liquidity to the financial markets, helping to maintain stability. Following the onset of the 2008 international financial crisis, global liquidity in major currencies became tight, prompting several countries and regions' central banks to propose establishing currency swap mechanisms with China for liquidity support. These arrangements for central banks to promise mutual liquidity support play a crucial role in maintaining global financial stability. At present, the currency swap network established by the PBOC has become an essential component of the global financial safety net. Second, currency swaps can also support the real economy; a country's central bank can provide swap funds through commercial banks to enterprises for bilateral trade and investment, thereby enhancing trade and investment facilitation between the two countries. Moreover, currency swaps are an important part of bilateral financial cooperation, encouraging both parties' financial institutions to offer bilateral currency settlement services. This promotes bilateral currency settlements and helps enterprises in both countries reduce exchange costs and alleviate exchange rate risks.
In the future, the PBOC will orderly expand the coverage of currency swap cooperation, focusing on deeper collaboration with countries and regions closely connected to our economic and trade relationships. We aim to effectively use swap funds, enhance liquidity supply, and facilitate trade and investment.
Reporter: How will the PBOC advance the broader use of RMB in international trade and investment financing in the next phase?
Head of Macro-Prudential Management Bureau: The cross-border use of the RMB is a naturally evolving process. As the pace of diversification of the international monetary system accelerates, the endogenous demand for RMB is increasing among economic entities. The PBOC will continue to create a more favorable environment for domestic and foreign entities to hold and use RMB, in accordance with the directives from the central government and the State Council. We will focus on several key areas:
Firstly, we will improve services for the real economy and promote trade and investment facilitation. We will strengthen high-quality policy supply, comprehensively review, optimize, and integrate policies related to RMB settlement in cross-border trade and investment. We will further improve enterprise overseas listing fund management policies and optimize the financing pool policies for multinational corporations. We will guide commercial banks to enhance their cross-border financial service capabilities, include more qualified enterprises in the list of preferred clients, streamline business processes, and improve the efficiency of RMB funds collection and payment.
Secondly, we will deepen the financing functions of the RMB. We will continue to enhance RMB financing support policies and tools, better utilize the support of the currency swap mechanism for RMB's cross-border use, improve management of cross-border interbank RMB financing, and encourage and support more qualified foreign entities to issue Panda bonds domestically.
Thirdly, we will further promote high-level bilateral opening of financial markets. By enhancing transparency, regulatory clarity, and predictability, we will increase trading efficiency and liquidity in financial markets, appropriately integrate investment channels, and attract more orderly overseas institutional investments into the domestic market. We support the development of Shanghai as an international financial center and aim to build it into a center for RMB financial asset allocation and risk management.
Fourthly, we will support the development of the offshore RMB market. We will optimize arrangements for cross-border RMB liquidity supply, improve the layout of clearing banks, and continuously strengthen policy support for liquidity for these banks. We will support various domestic and foreign entities in issuing and trading RMB assets abroad, regularly issuing central bank bills to enrich liquidity management and risk management tools. We aim to solidify and elevate Hong Kong's position as an international financial center and a hub for offshore RMB activities.