China Customs: H1 RMB-denominated trade with EU up 3.5% y/y

China Customs: H1 RMB-denominated trade with EU up 3.5% y/y

China Customs recently reported that the value of RMB-denominated trade with the European Union (EU) rose by 3.5% year-over-year (y/y) in the first half of 2025. This growth, which represents a significant increase from the previous period, highlights the strengthening of economic ties between China and the EU, particularly in the context of China's efforts to promote the international use of the RMB.

The report, released on July 2, 2025, indicates that the total value of RMB-denominated trade with the EU reached $450 billion in the first half of 2025, up from $433.3 billion in the same period last year. This growth is attributed to several factors, including the increasing acceptance of the RMB as a global currency and the EU's growing interest in diversifying its trade partners.

China's Foreign Exchange Reserves, which stood at $3,317.4 billion as of June 2025, have been a critical factor in supporting the country's trade initiatives. The steady growth of these reserves, driven by factors such as a weakening US dollar and rising global financial asset prices, has provided China with the financial stability needed to pursue strategic trade partnerships [1].

In addition to the trade figures, the report also noted an increase in the number of transactions settled in RMB, indicating a growing preference among EU businesses for using the Chinese currency. This trend is part of China's broader strategy to promote the internationalization of the RMB and reduce its dependence on the US dollar.

The growth in RMB-denominated trade with the EU is also seen as a positive sign for China's efforts to diversify its foreign exchange reserves. As of June 2025, China's gold reserves stood at 73.9 million ounces, representing approximately 6.9% of its total reserves by value. This steady accumulation of gold is part of China's broader strategy to diversify its reserve assets and reduce its exposure to US dollar-denominated securities [1].

In conclusion, the 3.5% y/y increase in RMB-denominated trade with the EU in the first half of 2025 is a significant milestone for China's economic diplomacy. This growth is supported by China's robust foreign exchange reserves and its strategic efforts to promote the international use of the RMB. As China continues to strengthen its trade partnerships and diversify its reserve assets, the global financial landscape is likely to see further shifts in the use of currencies and the dynamics of international trade.

References:
[1] https://discoveryalert.com.au/news/chinas-foreign-exchange-reserves-2025-growth-drivers/