Tribune. If China remains the first exporting country and the second largest economy in the world by its gross domestic product (GDP), its currency is not yet of global importance. The US dollar, on the other hand, is involved in over 88% of foreign exchange transactions and its dominance as a reserve and trading currency offers multiple advantages in the United States, ranging from lower borrowing costs to reduced currency risk. .
Beijing has launched many initiatives in recent years to increase the presence of the Chinese currency in foreign trade, investments and foreign exchange reserves. Sound 13e five-year plan (2016-2020) clearly announced its monetary ambitions, affirming “Regularly promote the internationalization of the Chinese currency so that renminbi-denominated capital becomes global”.
After the creation in 2007 of the renminbi [l’autre nom du yuan] “Offshore” (intended for foreign trade), China has launched its own interbank payment system, the CIPS [China International Payment System], supposed to compete with the global SWIFT network [Society for Worldwide Interbank Financial Telecommunication]. CIPS saw an almost 80% increase in volumes between 2017 and 2019, with around 26 trillion renminbi processed directly during this period.
Marginal use
Unsurprisingly, its use has exploded in the countries involved in the Belt and Road Initiative (BRI), which represents a potential vector for the use of the renminbi in the countries concerned.
Likewise, the Regional Comprehensive Economic Partnership (RCEP), which forms a trading bloc between China and fourteen other nations – including the Association of Southeast Asian Nations (ASEAN) countries, Australia and New Zealand – is an opportunity for China to promote renminbi settlement without causing tensions with other global economic heavyweights.
We can also cite swap contracts [échange] foreign exchange contracts with more than thirty-six central banks over the past ten years, or the issuance of renminbi-denominated bonds to foreign investors (dubbed “Dim sum bonds”).
These initiatives have recently been accompanied by a liberalization of the conditions for foreign direct investment in renminbi for foreign companies, and a shortening of the list of industries considered to be restricted or prohibited from such investments.
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