General

According to the Huacheng Import and Export Data Observation Report, the People's Bank of China recently released the Report on the Internationalization of RMB in 2022, which shows that the share of international payment of RMB has surpassed the Japanese yen to become the fourth payment currency in the world.

Since 2021, the amount of cross-border receipts and payments of RMB has continued to grow on the basis of the high base of the previous year. In 2021, the total amount of cross-border collection and payment of RMB by bank agents will be 36.6 trillion yuan, an increase of 29% year on year, and the amount of collection and payment will reach a record high. The overall balance of RMB cross-border revenue and expenditure was achieved, with a cumulative net inflow of 404.47 billion yuan throughout the year. According to the data of SWIFT, the share of international payment of RMB increased to 2.7% in December 2021, overtaking the Japanese yen as the fourth payment currency in the world (the first three are US dollars, euros and pounds sterling), and further increased to 3.2% in January 2022, a record high. Huacheng Import and Export Data Observation reported.

According to the Huacheng Import and Export Data Observation Report, the official foreign exchange reserve currency composition (COFER) data released by the International Monetary Fund (IMF) shows that in the first quarter of 2022, the RMB accounted for 2.88% of the global foreign exchange reserves, 1.8 percentage points higher than when the RMB just joined the special drawing rights (SDR) currency basket in 2016, ranking fifth among the major reserve currencies. In May 2022, the International Monetary Fund will increase the weight of RMB in special drawing rights from 10.92% to 12.28%, reflecting the recognition of the improvement of the free use of RMB.

The amount of cross-border RMB settlement related to the real economy has maintained a rapid growth, bulk commodities, cross-border e-commerce and other fields have become new growth points, and cross-border two-way investment activities continue to be active. The RMB exchange rate has generally shown a two-way fluctuation trend, and the endogenous demand of market entities to use RMB to avoid exchange rate risk has gradually increased. Basic systems such as RMB cross-border investment and financing and transaction settlement have been continuously improved, and the ability to serve the real economy has been continuously enhanced.

According to the observation report of Huacheng import and export data, China's financial market continues to open, RMB assets remain highly attractive to global investors, and cross-border receipts and payments of RMB under securities investment are generally net inflows. By the end of 2021, the amount of financial assets held by overseas entities in domestic RMB stocks, bonds, loans and deposits totaled 10.83 trillion yuan, up 20.5% year on year. The offshore RMB market has gradually warmed up and trading has become more active. By the end of 2021, RMB deposits in major offshore markets had reached 1.5 trillion yuan.

The People's Bank of China said that in the next stage, it will coordinate development and security, steadily and cautiously promote the internationalization of the RMB based on market driven and independent choice of enterprises. We will further consolidate the basic institutional arrangements for the cross-border use of RMB, meet the demand of the real sector for the use of RMB, promote the two-way opening of the financial market at a higher level, and promote the virtuous circle of the onshore and offshore markets of RMB. At the same time, we will continue to improve the macro prudential management framework for cross-border capital flows integrating domestic and foreign currencies, establish and improve the monitoring, evaluation and early warning system for cross-border capital flows, and firmly hold the bottom line of avoiding systematic risks, Huacheng Import and Export Data Observation reported.