2025-06-16-花旗集团-亚洲外汇与利率策略_人民币国际化_我们现在何处_下一步是什么_27页_667kb

Summary of RMB Internationalization

Core Content

RMB internationalization refers to the process of increasing the use of the Chinese yuan in international transactions, including trade, investment, and financial markets. It is gaining renewed attention due to trade tensions and the potential diversification from the US dollar as the dominant global reserve currency. The goal is to enhance the RMB's role as a medium of exchange, unit of account, and store of value, both within and outside China.

Main Points

• RMB Internationalization Progress:

  • RMB already accounts for 50–60% of China's cross-border payments, driven by capital and financial flows.
  • Trade settlement share is rising, with offshore CNH (China offshore yuan) activities growing significantly larger than onshore RMB flows.
  • The PBoC has shifted its language from "steadily, cautiously, solidly advancing RMB internationalization" to "orderly advancing the international usage of RMB," indicating a more practical and strategic approach.

• Benefits of RMB Internationalization:

  • Reduces FX translation and market risks for China and global investors.
  • Lowers FX transaction costs with the rest of the world.
  • Offers a more balanced global monetary system by reducing reliance on the USD.

• Key Drivers:

  • The need to manage risks of the current global currency system.
  • Growing importance of RMB as an investment asset and pricing currency.
  • The need to reduce transaction costs and risks in international dealings.

• Measuring RMB Internationalization:

  • Onshore-offshore circulation: RMB is used in transactions between China and the rest of the world.
  • Offshore-offshore circulation: RMB is used in transactions outside of China, primarily through FX swaps and other financial instruments.
  • The CNH money market is still primarily based on USD collateral, presenting an opportunity for expansion using more RMB-denominated collaterals.

Key Opportunities and Challenges

• RMB's Answer to Triffin's Dilemma:

  • China can maintain a trade surplus and supply RMB to the offshore market through outbound investment, mitigating the need for a trade deficit.
  • The current account has historically been the main channel, but the capital and financial account has become the dominant one in recent years.

• Expanding RMB Usage:

  • To encourage broader offshore adoption, RMB needs to play a larger role in pricing commodities and services.
  • There is a need to improve the risk-adjusted return and reduce the cost of financing and using the RMB.
  • Developing a CNH money market based on RMB-denominated collateral is a key opportunity.

• CNH Liquidity and Financial Instruments:

  • The CNH liquidity pool in Hong Kong is relatively small, around RMB 0.5tn, but supports large clearing volumes.
  • "Synthetic" positions, such as FX swaps, form a significant part of CNH liquidity, suggesting room for growth.
  • The offshore RMB bond market (dim sum bonds) has seen a resurgence, reaching RMB 1.5tn in outstanding amount.

• HK's Role:

  • Hong Kong plays a central role in CNH circulation, particularly through the HK interbank clearing system.
  • The HK banking system's CNH balance sheet is estimated at RMB 3tn in assets and RMB 1.5tn in liabilities, with forward positions contributing significantly to liquidity.
  • The CNH clearing volume in HK is substantial, with monthly volumes reaching RMB 50–70tn in recent years.

Supporting Infrastructure

• CIPS (Cross-border Interbank Payment System):

  • A dedicated system for cross-border RMB payments, replacing the older CNAPS system.
  • Uses ISO20022 messaging standard, which will be fully adopted by SWIFT by November 2025.

• mbridge and CDBC:

  • PBoC is researching central bank digital currency (CDBC) and the mbridge project, which aims to build a cross-border payment system using CDBC and distributed ledger technology.
  • These projects could support RMB internationalization but are not sufficient on their own; market adoption is also essential.

Current Status and Outlook

• RMB International Clearing Volume:

  • RMB's share in SWIFT payments has dropped to 6–8% of USD volume, but remains a significant portion of the global payment system.
  • When considering CNH clearing volume in Hong Kong and CIPS, the RMB's share of USD volume can reach 25%, indicating strong offshore usage.

• Foreign Ownership of China Financial Assets:

  • Foreign investors hold about 5% of China's stocks and bonds, leaving room for further growth.
  • The CNH money market and offshore RMB financial instruments are still underdeveloped compared to the scale of transactions.

• Future Steps:

  • Expanding outbound RMB portfolio investment.
  • Encouraging offshore adoption of the RMB in pricing and settlement.
  • Developing a CNH money market with RMB-denominated collateral.
  • Enhancing the CNH liquidity pool and financial instruments.

Conclusion

RMB internationalization is progressing, with offshore-offshore circulation playing a more prominent role than onshore-offshore. While the RMB is already widely used in cross-border payments and investment flows, further efforts are needed to increase its role in global trade and finance. The development of a CNH money market, the expansion of offshore RMB financial instruments, and the strategic use of outbound investment are key to achieving a more robust international presence for the RMB. Hong Kong remains a crucial hub in this process, supporting significant CNH liquidity and transactions.