Chinese yuan Photo:VCG

The internationalization of the yuan has been steadily progressing in recent years, with the latest encouraging development being the yuan's settlement share in global trade, which hit a record of 24 percent in the first seven months of the year, an official of China's central bank said on Sunday.

Jin Zhongxia, director general of the International Department of the People's Bank of China (PBC), provided the figure during a sideline forum of the ongoing China International Fair for Trade in Services in Beijing.

From the perspective of investment, the balance of yuan assets allocated by overseas entities had reached 9.8 trillion yuan ($1.35 trillion) as of the end of June, Jin noted, adding that the yuan's share in global payments surpassed 3 percent in July.

The yuan has become the world's fifth largest currency for reserves, payments and trading, and the third-largest currency for trade financing. In May 2022, the IMF increased the yuan's weight in the Special Drawing Rights currency basket from 10.9 percent to 12.3 percent.

As China's economic strength steadily grows, its position in the global industrial and supply chains continues to rise, and the functions of the yuan as an international reserve currency and payment currency continue to strengthen. More and more countries are actively promoting currency arrangements and partnerships with China, experts said.

The latest cases include Bolivia adopting the yuan for trade settlements, becoming the third South American nation to do so. 

Meanwhile, the Bolivian government is pushing for the opening of Chinese banks in the country as soon as possible, according to local media reports.

Argentina made a deal with China's central bank to settle more than half of its $2.7 billion debt due in August to the IMF in yuan. The agreement allows Argentina to meet its IMF obligations "without using a single dollar of its reserves," Argentine Economy Minister Sergio Massa said in a speech on YouTube.

In China's own cross-border transactions, the proportion of yuan settlements reached 49 percent in the second quarter of 2023, surpassing the US dollar for the first time, according to media reports.

While the internationalization of the yuan is a long-term incremental process, it is an irreversible trend, Chinese experts noted, calling for proactive management of the pace and trajectory of the internationalization process.

Global Times