As China accelerates the two-way opening-up of its financial market, overseas market entities will continuously raise the international status of the renminbi and increase their willingness to participate in the RMB financial market. This will lead to huge room for improvement of the proportion of RMB assets in total investable assets of overseas financial institutions, a new report said.
The deepening of the implementation of the Belt and Road Initiative and the Regional Comprehensive Economic Partnership will also bring new opportunities for the internationalization of RMB and promote continuous improvement in the offshore RMB service network, said the report recently issued by the China Banking Association.
The global status of RMB has improved steadily in terms of receipts and payments, currency reserves, and foreign exchange transactions. By the end of 2021, the People's Bank of China, the nation's central bank, had set up 27 RMB clearing banks in 25 countries and regions outside the Chinese mainland, the report said.
In 2021, China's cross-border receipts and payments in RMB totaled 36.6 trillion yuan ($5.06 trillion), up 29 percent from the previous year. The value accounted for 48.4 percent of cross-border receipts and payments in RMB and foreign currencies during the same period, reaching a new record, according to the PBOC.
By the end of last year, overseas institutions and individuals held domestic bonds worth 4.09 trillion yuan, up 22.65 percent year-on-year. Overseas investors have increased their holdings of domestic bonds for eight consecutive years since 2014.
China's Cross-border Interbank Payment System has become the main channel of cross-border RMB settlement. Last year, CIPS processed 3.34 million payments with the amount totaling 79.6 trillion yuan. Its business had covered more than 3,600 banking institutions in 178 countries and regions by the end of 2021, the report said.
To further speed up the internationalization of RMB, experts made a number of suggestions to government departments and regulators, such as enlarging the size of bilateral currency swaps, further improving policies to facilitate the cross-border use of RMB, further expanding the scope of CIPS participants, and accelerating explorations of infrastructure construction that promotes cross-border payments in China's digital currency, the report said.