The share of the yuan in China's international settlements for the first time in history bypassed the US dollar. Thus, Beijing has achieved another goal in its global goal to reduce the share of the US currency in international settlements, writes Bloomberg, citing data from the State Monetary Administration of China.
Even 13 years ago, the share of the yuan in cross-border trade was almost 0%, while the share of the dollar in 2013 was 83%. Over 10 years, the share of the Chinese currency in China's international trade has grown to 48%, while the share of the US dollar has decreased to 47%.
The calculations include all cross-border transactions, including securities trading between China and Hong Kong. Experts, however, attribute the achievement to securities, and specifically to the outflow from stocks traded in the Hong Kong dollar to government bonds traded in the yuan. This opinion is shared, for example, by the chief foreign exchange strategist at BI Stephen Chiu.
At the same time, the share of the yuan in international trade remains insignificant and amounts to only 2.3%. According to the international system of cross-border transfers SWIFT, the share of the Chinese currency remained virtually unchanged in March. However, analysts believe that the international share of the yuan will grow over time.
“International use of the yuan is accelerating as other countries seek an alternative payment currency to diversify risk, and confidence in the Federal Reserve is no longer as strong as it used to be. But at the same time, we must recognize that dollar dominance is still a long way off, and the yuan's share of global payments could be small forever,” says Chris Leung, an economist at DBS Bank.
The Chinese authorities are pleased with the increase in the share of the yuan in the international trade of their companies. A spokeswoman for the State Monetary Administration of China expressed hope that the share of cross-border transactions will continue to grow, as this reduces the risks for Chinese enterprises.
After the introduction of sanctions by Western countries against Russia, the authorities of many states took care of diversifying their foreign exchange reserves and international accounts. They fear that the United States and the European Union may use their currencies as a tool of pressure, as was the case with Moscow. Against this background, the share of international payments in national currencies is growing. In addition to China, such measures have already been taken by Brazil, Saudi Arabia, India, as well as Russia and a number of former Soviet republics that are closely connected with Russia in trade terms.