• RMB adoption in cross-border trade surges at 15% annual growth rate
• Motivations behind the use of RMB remain consistent annually
• Companies express confidence in RMB growth benefits

Despite the ongoing global geopolitical tensions and increased Chinese Renminbi (RMB) exchange-rate fluctuations since 2022, the international use of the RMB has continued to show a stable and upward trend.

RMB adoption in cross-border trade surges at 15% annual growth rate

According to the People’s Bank of China’s (PBoC) Q4 2022 Monetary Policy Execution Report, the total value of RMB-based cross-border transactions reached RMB 42 trillion ($6.4 trillion), marking a 15% year-on-year (YoY) increase. In 2022, RMB-based transactions contributed to 49% of all cross-border transactions in China, rising 2 percentage points from 47% in 2021.

In 2023, China Construction Bank and The Asian Banker conducted a comprehensive survey on the international use of the Renminbi (RMB) across cross-border trade settlement, cash management, investment, and financing. The study encompassed 2,542 executives from Chinese companies, overseas companies, and global financial institutions (FI).

The survey underscores a continued expansion in the adoption of RMB for cross-border trade settlements among both Chinese and overseas companies, as well as FI.

More than half of FI (51%), Chinese companies (56%) and overseas companies (66%) reported an increase in RMB usage in cross-border trade settlements, with approximately a quarter reporting no change in use. Meanwhile, compared to 2022’s survey, 17% of FI, 20% of Chinese companies and 7% of overseas companies reported a reduction in RMB use in cross-border trade settlements.

Motivations for RMB use remain consistent 

The primary reason for overseas companies to use RMB is to obtain more favourable prices from suppliers, with the percentage increasing significantly from 50% in the previous year to 69% in 2023.  Additionally, 47% of overseas companies cited reducing FX risk as a key factor, marking a 10-point increase. Using RMB to get more business remains one of the key motivations for overseas companies, with 56% selecting this option, an increase of 6 percentage points from the previous year.

For Chinese companies, the primary motivation continues to be reducing FX risk, with the percentage increasing from 71% in the previous year to 75% in 2023. Other significant reasons include cost-reduction and enhanced pricing capabilities (64%), and obtaining more favourable prices from suppliers (63%).

Companies express confidence in RMB growth benefits

Looking ahead, RMB usage in cross-border trade is expected to continue, with a significant portion of FI (57%), Chinese companies (56%), and overseas companies (65%) anticipating increased settlement in the coming year. Additionally, a notable increase is observed in those expecting stable usage compared to 2023, with percentages at 27%, 21%, and 27%, for FI, Chinese companies, and overseas companies, respectively.
 

The full report is available in both English and Chinese, spanning a total of 110 pages. Download it here: https://reports.tabinsights.com/reports/rmb-internationalisation-report