China's State Administration of Foreign Exchange: RMB accounted for 53% of China's cross-border receipts and payments in the first half

China's State Administration of Foreign Exchange: RMB accounted for 53% of China's cross-border receipts and payments in the first half

China's State Administration of Foreign Exchange (SAFE) has released data indicating that the renminbi (RMB) accounted for 53% of China's cross-border receipts and payments in the first half of 2025. This significant increase reflects China's ongoing efforts to internationalize the RMB and reduce its reliance on the US dollar in global trade and finance.

The growing use of the RMB in cross-border transactions is part of a broader trend of de-dollarization in the Association of Southeast Asian Nations (ASEAN). Experts attribute this shift to geopolitical uncertainties, monetary shifts, and increasing currency volatility, which have prompted a move away from the US dollar [1]. Malaysian private equity investor Ian Yoong Kah Yin, who frequently uses QR codes for cross-border payments, notes that the reduced role of the US dollar and the growing role of the Chinese yuan and local currencies used by ASEAN members are "inevitable" [1].

China has been actively promoting the use of the RMB in cross-border transactions through various measures. The People's Bank of China has signed bilateral currency swap agreements with several ASEAN central banks, including Thailand, Malaysia, Indonesia, and Laos [1]. Additionally, Chinese enterprises are the "most active participants and promoters" of the international use of the RMB, and their growing presence in ASEAN has spurred demand for renminbi settlement, trading, and financing [1].

The 46th ASEAN Summit, held in Kuala Lumpur in May 2023, saw ASEAN leaders commit to promoting local currency settlements as part of the ASEAN Economic Community Strategic Plan 2026-2030. The regional bloc aims to deepen financial integration and inclusion through measures such as liberalizing capital accounts, strengthening regional payment connectivity, and promoting local currency settlements [1].

The 42nd ASEAN Summit, held in May 2023 in Labuan Bajo, Indonesia, further advanced regional payment connectivity and promoted local currency transactions. ASEAN leaders signed an agreement to advance regional payment connectivity and promote local currency transactions, emphasizing the importance of a QR interoperable payment system [1].

The increasing use of the RMB in cross-border transactions is also driven by the growing demand for renminbi settlement, trading, and financing. In 2023, the renminbi cross-border receipts and payments for trade in goods between ASEAN and China exceeded 2 trillion yuan ($279 billion) for the first time, accounting for over 30% of the total bilateral trade [1].

The shift towards the RMB as a primary settlement currency is expected to bring several benefits, including reduced foreign exchange costs, diversification of reserves, and closer trade links with China. However, the operationalization of the RMB as a primary settlement currency still lags behind the US dollar in scale and acceptance. For ASEAN, the key is balancing diversification with financial stability, especially as renminbi's full internationalization remains a gradual process [1].

References:
[1] https://www.chinadailyhk.com/hk/article/616001
[2] https://www.chinadaily.com.cn/a/202507/18/WS6879fd8ba310ad07b5d90b5e.html