Swift-2018人民币国际化展望-跟踪特别报告（英文）-2018.1-20页

RMB Internationalisation: Where We Are and What We Can Expect in 2018

Core Content Overview

This document provides a comprehensive analysis of the progress and challenges of the Renminbi (RMB) internationalisation in 2017 and outlines expectations for 2018. It highlights key initiatives, trends, and statistics that illustrate the current state of RMB usage in global trade, finance, and digital payments.

Main Points and Key Information

1. RMB Internationalisation Progress

• RMB as a reserve currency: Although included in the IMF's SDR basket in 2016, its adoption as a reserve currency remains limited. The ECB and Bundesbank have started to include RMB in their reserves, but its share is still very low (0.7% for ECB).
• RMB usage in payments: RMB's share in international payments is 1.61%, with a lower 0.98% when considering only cross-border payments. The USD remains the dominant currency in global payments.
• RMB in FX market: The CNY/USD pair accounts for 97.08% of RMB trading, with minimal liquidity in other pairs. RMB is not settled in the CLS system and is ranked as the 8th most actively traded currency globally.
• RMB as a global currency: Despite China's growing economic influence, RMB's international role is still limited, with only 16% of China's trade settled in RMB.

2. Key Initiatives and Projects

• Belt and Road Initiative (BRI): Launched in 2013, the BRI involves over 100 countries and international organisations. It is seen as a major driver for RMB internationalisation, especially in infrastructure projects.
  • 2018 expectations: Projects like the Jakarta-Bandung high-speed railway, Addis Ababa-Djibouti railway, and Gwadar port upgrades are expected to be accelerated.
• Bond Connect: A major breakthrough in China's onshore bond market, launched in July 2017. It allows international investors to access the CIBM and has seen significant growth:
  • Participants: 247 overseas investors from 18 countries approved by end of 2017.
  • Foreign holdings: Increased from RMB 842.5 billion to RMB 1,147.4 billion in six months.
  • Benefits: Streamlined access, price discovery, and efficient settlement processes.

3. Digital Acceleration

• Mobile payment platforms: Alipay and WeChat Pay have expanded rapidly, with over 520 million users in China and increasing international reach.
  • Alipay: Processed nearly 1.5 billion transactions worth US$25.3 billion on Singles Day 2017, mostly via RMB.
  • WeChat Pay: Holds a 40% market share in China and is accepted in 15 countries by December 2017.
• SWIFT gpi: A global initiative that has supported RMB internationalisation by making payments faster, transparent, and traceable. As of 2017, 22 Chinese banks are on SWIFT gpi.

4. Offshore RMB Centres

• Hong Kong: Remains the largest RMB clearing centre with a 75.68% activity share. It serves as a crucial intermediary for RMB transactions.
• Other centres: London is the second-largest clearing centre globally, but its share has decreased from 6.51% to 5.59% in 2017. The euro has grown in prominence, but the USD still dominates.

5. Future Outlook for 2018

• BRI impact: Continued focus on BRI projects could boost RMB usage, especially in infrastructure and trade.
• Digital expansion: Mobile payment platforms like Alipay and WeChat Pay are expected to grow further, both domestically and internationally.
• SWIFT gpi and CIPS: These systems are vital for improving cross-border payment efficiency and transparency, supporting RMB internationalisation.
• Bond Connect: The success of Bond Connect could lead to future benchmark inclusion in global indices, similar to the inclusion of Chinese A-shares in MSCI.
• Uncertainties remain: Capital controls and regulatory concerns may slow RMB adoption, but ongoing initiatives and strategic moves by China and its partners suggest a positive trajectory.

Summary of Key Statistics

• RMB clearing activity: Hong Kong holds 75.68% of RMB clearing activity.
• RMB share in international payments: 1.61% (0.98% cross-border only).
• RMB share in FX turnover: 4% globally, with 97.08% of RMB trading against the USD.
• SWIFT gpi: 22 Chinese banks are participating, enhancing RMB payment efficiency.
• Bond Connect: 247 overseas investors approved, foreign holdings in CIBM rose by 36%.
• RMB in commodity trading: Efforts to denominate oil and gold contracts in RMB are ongoing, with potential for significant growth.

Conclusion

While the RMB is not yet a major global currency, 2017 marked important strides in its internationalisation through initiatives like the BRI, Bond Connect, and SWIFT gpi. These developments, alongside digital innovation and growing international interest, position the RMB for future growth. However, challenges such as capital controls and limited liquidity in RMB pairs persist, and the pace of adoption remains slower than anticipated. 2018 is expected to see continued progress, driven by strategic projects and financial reforms.