年-SWIFT环球同业银行金融电讯_RMB_Tracker_January_2018_Special_report_20页_464kb

RMB Tracker Summary – January 2018

Core Content

The SWIFT RMB Tracker report from January 2018 provides an overview of the renminbi (RMB) internationalisation progress in 2017, highlighting key initiatives, developments, and challenges. It also outlines expectations for 2018, focusing on the role of the RMB in global trade, finance, and digital transformation.

Main Points and Key Insights

1. RMB Internationalisation Progress

• The RMB is still not a major reserve currency globally, with only 0.7% of the European Central Bank's reserves allocated to the RMB.
• Despite growing China's global economic role, RMB usage remains low in international payments and trade.
• RMB internationalisation is influenced by several key trends:
  • The Belt and Road Initiative (BRI), which has expanded to over 100 countries and international organizations.
  • The digital transformation through platforms like Alipay and WeChat Pay, which have significantly increased RMB usage in consumer transactions.
  • The globalisation of Chinese banks and their adoption of SWIFT gpi, enhancing the speed, transparency, and traceability of RMB payments.

2. Initiatives Supporting RMB Internationalisation

• Bond Connect: A major breakthrough in China's onshore bond market, allowing international investors to access the CIBM. As of December 2017, 247 overseas investors from 18 countries were approved, and foreign holdings in CIBM increased by 36% to RMB 1,147.4 billion.
• SWIFT gpi: A key enabler for faster, more transparent cross-border RMB payments. 22 Chinese banks are on SWIFT gpi, contributing to the RMB's growth in the FX market.
• CIPS (Cross-border Interbank Payment System): Facilitates RMB payments and supports international connectivity, particularly for trade with countries involved in BRI.

3. RMB Usage in Payments and Trade

• Hong Kong remains the largest RMB clearing centre, accounting for 75.68% of RMB activity.
• The RMB share in international payments is 1.61%, with 0.98% in cross-border payments alone.
• The CNY/USD pair dominates 97.08% of RMB trading, indicating the USD's continued dominance in global RMB transactions.
• Only 16% of China's trade is settled in RMB, showing a low level of RMB usage in trade settlements.
• 80.47% of payments where the ultimate beneficiary is in China or Hong Kong are still in USD, highlighting the dollarisation of global trade.

4. Digital Acceleration and Growth

• Alipay and WeChat Pay are leading the digital transformation of RMB usage, with Alipay processing over 1.5 billion transactions worth US$25.3 billion on Singles Day 2017.
• WeChat Pay has a market share of over 40% in China and is expanding to 15 countries.
• RMB usage in the FX market is more than promising, with SWIFT gpi significantly improving the efficiency and transparency of RMB transactions.

5. 2018 Outlook

• The BRI is expected to drive more RMB usage in trade, especially as Chinese firms may start using RMB for transactions.
• Commodity trading in RMB, particularly oil contracts, could be a catalyst for RMB internationalisation, with Russia and Saudi Arabia potentially following this trend.
• The RMB's inclusion in global bond indices is being closely monitored, similar to the Stock Connect initiative that led to the inclusion of A-shares in the MSCI Emerging Markets Index in 2017.
• SWIFT gpi is expected to continue supporting RMB growth in cross-border payments, making it faster and more transparent.

Key Statistics

• RMB activity share: 75.68% in Hong Kong, 1.61% globally, 0.98% in cross-border payments.
• RMB as a reserve currency: Only 0.7% of ECB reserves are in RMB.
• SWIFT gpi: 22 Chinese banks are participating, with over 8 million payments sent globally.
• CNY/USD: Dominates 97.08% of RMB trading, with no substantial liquidity in other RMB pairs.
• Digital payment platforms: Alipay and WeChat Pay have seen rapid growth, with US$3 trillion in total payments in China in 2017.
• Top trading locations for RMB currency pairs:
  • United Kingdom: 32.99% (value), 40.66% (volume)
  • France: 9.85% (value), 4.56% (volume)
  • United States: 9.22% (value), 9.55% (volume)
  • China: 8.48% (value), 8.73% (volume)
  • Hong Kong: 19.70% (value), 10.79% (volume)

Conclusion

The RMB is still in the early stages of internationalisation, with significant growth potential. While digital platforms and BRI projects are driving its adoption, capital controls and low global usage remain key challenges. SWIFT gpi and Bond Connect are playing a critical role in enhancing the efficiency and accessibility of RMB transactions. In 2018, the focus will be on expanding RMB usage in trade and finance, particularly through commodity pricing and global market integration.