Cross-border use of RMB becomes increasingly popular at home and abroad

File photo shows a worker counts Chinese currency Renminbi (RMB) at a bank in Linyi, east China's Shandong Province. (Xinhua/Zhang Chunlei)

With China's total import and export volume of goods trade hitting a record high of over 40 trillion yuan in 2022, the renminbi (RMB) settlement in goods trade surged 37 percent year on year to 7.92 trillion yuan, showing the Chinese currency RMB is gaining more popularity at home and abroad.

In 2022, the proportion of enterprises using RMB settlement in goods trade has increased quarter by quarter, and the advantages of RMB in cross-border use in avoiding exchange rate risks and saving exchange costs have been further demonstrated. RMB cross-border financial service has been welcomed by more and more enterprises.

-- Cross-border use of RMB becomes increasingly popular

In recent years, the exchange rate fluctuations of international major currencies have increased, which further increases the willingness of enterprises to use RMB in transaction settlement, and significantly increases the demand for cross-border RMB investment, financing and risk management.

Ms. Ou, the head of a small company engaged in the production and sales of sports shoes in Guangdong Province, said that the company's products are exported to Europe and mainly settled in euro, and the foreign exchange settlement is usually handled after receiving the export income.

Last year, the company tried to use RMB for settlement with their European customers and found that the cross-border RMB settlement can not only avoid exchange rate risks but also improve the speed of capital withdrawal, Ms. Ou said.

At present, the clients choose to use RMB as an important foreign exchange asset and directly use it for trade settlement because they are optimistic about the prospects of RMB and also want to enhance their cooperation with Chinese enterprises, said Mr. Mo, general manager of an energy-saving lighting company in Dongguan, Guangdong.

-- Innovation pilot policies promote cross-border RMB use to a higher level

Thanks to the effective implementation of a series of supporting policies, more and more enterprises begin to use cross-border RMB for settlement.

As a pilot province in cross-border RMB settlement, more than 160,000 enterprises in Guangdong have handled cross-border RMB settlement.

The initiative to facilitate cross-border RMB use is highly in line with market demand. RMB settlement can avoid exchange rate risks, and enterprises have gradually formed the habit of using cross-border RMB for settlement, which is also a market-driven result, according to an official of the Guangzhou branch of the People's Bank of China .

At the same time, innovation in cross-border finance is also being promoted. Taking advantage of the two-way flow facilitation policy of the cross-border RMB under the financial innovation pilot of China-Malaysia Qinzhou Industrial Park (Guangxi), the New Cornerstone Energy Investment Center in Guangxi Free Trade Zone, a foreign-invested equity investment QFLP fund, remit 1.34 million yuan of the first phase of paid-in funds from Hong Kong to the capital account opened by the Qinzhou Port Free Trade Zone Branch of China Construction Bank in the form of offshore RMB on February 9, marking the successful implementation of the first "QFLP + cross-border RMB" business in Guangxi.

Since the Regional Comprehensive Economic Partnership (RCEP) came into force in 2022, the economic and trade ties in the region have further expanded the space for cross-border RMB use, according to an official of the Guangdong branch of a large state-owned bank.

-- Overseas circulation and use of RMB become more active

In 2022, the amount of RMB remittances from clients outside the Chinese mainland grew by 5.4 percent, about 4 percentage points higher than the overall growth rate of global RMB remittances.

In 2022, the volume of cross-border RMB remittances from Belt and Road countries increased by 39.8 percent, and the volume from RCEP countries increased by 9.9 percent. The increasingly close economic and trade ties between China and these regions have led to a rapid increase in the cross-border use of RMB.

In the Guangdong-Hong Kong-Macao Greater Bay Area, the volume of cross-border RMB business is surging. In 2022, the volume of cross-border RMB in Guangdong Province reached 5.9 trillion yuan, a year-on-year increase of 11.3 percent, accounting for 44.4 percent of the cross-border settlement of domestic and foreign currencies in the same period.

Since its launch in 2009, cross-border RMB settlement has maintained rapid development, and the proportion of cross-border RMB use has steadily increased, an official of the Guangzhou branch of the People's Bank of China said.

The Greater Bay Area is highly open with strong economic vitality and frequent exchange of foreign economy and trade, and the local cross-border RMB use has always been at the forefront of the country. In the past three years, RMB has remained the largest cross-border settlement currency in the Greater Bay Area, the official added.