China says yuan’s global rise is ‘irreversible’ – and has a strategy to back it up

Chinese financial authorities have pledged further steps to expand the yuan’s global use amid a broader de-dollarisation trend, while vowing to make listing on mainland stock exchanges the “primary” choice for top-tier domestic companies.

“The internationalisation of the yuan is a continuous and steady process, and an irreversible trend,” said Lu Lei, deputy governor of the People’s Bank of China (PBOC), at a press conference on Thursday.

To meet growing demand from market participants seeking more diverse currency options, the PBOC had steadily strengthened the yuan’s global monetary functions and international standing, Lu said.

To support this expansion, he said China would increase bilateral currency swap agreements and local-currency settlement while improving the Cross-Border Interbank Payment System – a Chinese alternative to Western-dominated settlement networks such as the Society for Worldwide Interbank Financial Telecommunication, or Swift.

The central bank would also expand cross-border use cases for the digital yuan and QR-code payments, Lu added, while it planned to optimise market access schemes – including Stock Connect, Bond Connect and Swap Connect – to further open up China’s onshore financial markets.

Authorities also pledged to reinforce Hong Kong’s role as the premier offshore yuan hub, while supporting tailored, differentiated market development in London, Singapore and Dubai.

Shanghai’s growth as a global hub for yuan asset allocation and risk management would be further enhanced, Lu added.