The year 2025 has marked an inflection point in China’s drive to internationalise the renminbi (RMB), or yuan, with usage of the currency in global trade and finance rising sharply. China’s expanding economic influence – from Belt and Road infrastructure projects to strategic financing initiatives – has spurred more cross-border deals to be billed in RMB. For exporters worldwide, this acceleration of yuan internationalisation is not just a headline; it carries practical implications for how they price goods, manage currency risk, and settle trade payments. The Chinese government’s efforts to reduce reliance on the US dollar have made the RMB increasingly accessible and appealing for trade settlements. As a result, more businesses are now considering whether to bill in RMB when dealing with Chinese partners. This introductory section sets the context for RMB’s 2025 momentum and why exporters should pay attention to this trend.
Historical Context and Policy Drivers
China’s RMB internationalisation strategy took shape in the late 2000s, blending economic goals with geopolitical aims. The 2009 pilot for cross-border trade settlement in RMB marked the start, followed by the creation of the offshore CNH market in Hong Kong, “dim sum” bond issuance, and the Shanghai Free Trade Zone to test freer currency exchange. A major milestone came in 2016, when the RMB entered the IMF’s Special Drawing Rights basket alongside the dollar and euro.
Policy drivers include the PBoC’s network of bilateral swap lines with around 40 countries, the designation of 31 offshore clearing banks across 27 nations, and the Belt and Road Initiative, which channels RMB into infrastructure loans and trade deals across Asia, Africa, and Latin America. Geopolitical pressures, such as sanctions and the push to reduce reliance on the US dollar, have reinforced this agenda. Tools like the Cross-Border Interbank Payment System (CIPS) and the pilot digital yuan (e-CNY) are building an RMB-centric payment ecosystem.
China’s gradual liberalisation has prioritised trade use and selective capital account opening, avoiding a full float. By 2025, this groundwork positions the RMB to challenge other major currencies in targeted areas, even if it is not yet poised to replace the US dollar.
Current Market Landscape (2024–2025)
RMB adoption has accelerated sharply, with its share of global trade finance reaching 6% by late 2023, triple its 2020 level, making it the third-most used currency in this segment, ahead of the euro and behind only the US dollar. In global cross-border payments, the yuan rose to 3.7% by September 2023 and briefly exceeded 4% in early 2024, overtaking the yen to rank fourth. SWIFT now consistently lists the RMB among the top five payment currencies, a major leap from a decade ago.
Domestically, around 26% of China’s goods trade was settled in RMB by the end of 2023, up from low-teen percentages in the 2010s. Trade with Russia has been pivotal, 36% of Russian exports were settled in RMB by early 2024, compared to almost none in 2022. Other commodity flows, such as oil from Iran or coal from Indonesia, are also increasingly RMB-priced. Brazil and Argentina have struck deals to use RMB for bilateral trade, while BRI and ASEAN nations are integrating RMB into projects and supply chains.
Offshore clearing capacity has expanded, with hubs in Hong Kong, London, Singapore, Paris, Luxembourg, and new centres in Brazil and Kazakhstan. CIPS usage is rising, with daily RMB transactions reaching $60 billion, signalling growing infrastructure for RMB trade even if still far behind USD systems.
Overall, RMB internationalisation remains most prominent in Asia and among China-linked economies, with reserve currency use still limited at 2–3%. Yet, for exporters connected to China or its supply chains, counterparties preferring, or expecting, to settle bills in RMB are becoming increasingly common.
Opportunities for Exporters: Advantages of Billing in RMB
With the yuan’s internationalisation, exporters have new opportunities to bill in RMB and potentially reap commercial benefits. One of the most immediate advantages is better pricing and terms when dealing with Chinese customers. Chinese companies often pad their USD-priced quotes with a buffer (typically on the order of a few percent) to hedge against currency fluctuations and conversion costs. By invoicing and settling in RMB, this buffer can be eliminated, translating into a direct cost saving for foreign exporters or a more competitive price for Chinese buyers. In fact, the PBoC has estimated that companies can save about 2–3% in transaction costs by using RMB instead of USD for cross-border trade. Surveys have found that a majority of Chinese businesses are willing to offer discounts – often in the range of 3-5% – if overseas partners pay in RMB. These savings arise from avoiding double currency conversions, reducing hedging expenses for the Chinese side, and bypassing certain bank fees associated with USD payments. In essence, agreeing to bill in RMB can improve an exporter’s profit margins while giving the Chinese importer a better deal – a win-win that can make a supplier more attractive in the China market.
Another opportunity is enhanced access to Chinese markets and financing. Exporters who transact in RMB often find it easier to tap into China’s financial services. For example, they can access RMB-denominated trade finance from Chinese banks, such as letters of credit in RMB or export invoice discounting in RMB, which can sometimes come with favourable interest rates. Chinese banks operating offshore (e.g. Bank of China, ICBC in cities like London or Sydney) actively support foreign companies with RMB accounts, credit lines, and hedging instruments. By having RMB revenues, an exporter might also consider raising capital in RMB – for instance, through Panda bonds (RMB bonds issued by foreigners in China) or dim sum bonds in Hong Kong – to fund expansion, taking advantage of often lower RMB borrowing costs. Furthermore, offering RMB invoicing can broaden an exporter’s customer base in China. Many Chinese importers, especially small and medium-sized enterprises, prefer dealing in their home currency to avoid the hassle of obtaining foreign exchange. An exporter able to issue quotes and invoices in RMB may attract buyers who would otherwise shy away due to currency concerns. This ability can be a marketing differentiator, signalling an exporter’s commitment to the China market and willingness to simplify transactions for local clients.
Using RMB also yields operational and strategic advantages. It can shorten payment cycles and reduce administrative friction. Transactions in RMB (particularly through offshore RMB hubs) can settle faster with less paperwork than USD transactions that might require currency exchange documentation. Chinese regulations in recent years have simplified documentation for RMB trade settlements – exporters no longer need to submit foreign exchange proof to China’s SAFE (State Administration of Foreign Exchange) for routine trade payments in RMB. This means fewer delays and lower compliance overhead for companies on both sides. Additionally, currency risk management can actually improve in certain scenarios: an exporter with ongoing business in China might have natural RMB outflows (like paying local suppliers or staff in China). Earning revenues in RMB provides a natural hedge and keeps money in the same currency, avoiding continuous conversions. Even if a company ultimately needs to convert RMB back to its home currency, it can choose optimal timing or hedge via the growing offshore RMB forward market. Many global treasury centres find that managing RMB exposure is getting easier as liquidity in RMB derivatives grows. Finally, embracing RMB invoicing aligns an exporter with a long-term trend. As China’s economic clout grows, being an early adopter of RMB usage could strengthen relationships and reputation. Chinese partners often view willingness to trade in RMB as a sign of goodwill and confidence in the currency, potentially deepening the partnership. In summary, billing in RMB can reduce FX costs, open doors to Chinese financing, enhance competitiveness in the China market, and streamline transactions – all compelling reasons for exporters to consider adding the yuan to their invoicing currencies.
Risks and Challenges of Billing in RMB
While the opportunities are real, exporters must also weigh the risks and challenges of billing in RMB. First and foremost is the issue of foreign exchange risk – when an exporter bills in RMB, they are accepting exposure to the yuan’s exchange rate. If the RMB weakens against the exporter’s home currency between the invoice date and payment date, the exporter could effectively receive less in home-currency terms. In other words, the exchange risk is borne by the offshore party once a deal is denominated in RMB. This is the flip side of removing the burden from the Chinese partner. Exporters will need to manage this risk through hedging instruments (such as forward contracts or options available in the offshore RMB market) or by adjusting prices. The RMB’s value can be volatile – for instance, the yuan has seen significant swings against the US dollar in recent years due to trade tensions and differing interest rates. Unlike the era of a strictly controlled peg, today the RMB trades with two-way volatility , meaning its value can go down or up by a few percent in short time spans. Companies that lack robust FX risk management may find this challenging.
Another challenge is liquidity and convertibility. The RMB is still not a freely convertible currency worldwide; it operates under a dual system (onshore CNY and offshore CNH). While the CNH market in places like Hong Kong is fairly liquid, it may not have the depth of the USD or EUR markets, especially for less common currency pairs. Large-value RMB conversions can sometimes move the market or incur wider bid-ask spreads, impacting conversion costs. Moreover, repatriating RMB from China is subject to some regulatory controls. Although China has greatly liberalised current account transactions (trade in goods and services), some capital account transactions remain restricted. This means if an exporter accumulates RMB and wants to invest or transfer funds out of China beyond trade needs, they might face regulatory hurdles. China’s capital controls and intervention in FX markets continue to limit the RMB’s attractiveness for unrestricted use. Exporters may occasionally encounter delays if Chinese banks or authorities ask for additional documentation to verify a payment’s legitimacy – for example, proving that an RMB payment is tied to a genuine goods shipment (a measure to prevent illicit flows). Such compliance requirements are generally routine but do add a layer of administration not present in fully free currencies.
Hedging requirements and costs form another consideration. If a company decides to bill in RMB, it should be prepared to hedge RMB exposure or else consciously speculate on the yuan’s moves. Hedging RMB is increasingly possible via offshore RMB forwards, swaps, and options, but those instruments may have somewhat higher costs or less availability in certain jurisdictions compared to major currencies. Smaller exporters in particular might find hedging in RMB unfamiliar and need to get up to speed on how to set up RMB currency accounts or forward contracts. Working with banks experienced in RMB trading is essential to avoid pitfalls. There’s also the risk of RMB liquidity crunches: although rare, periods of market stress have seen the offshore RMB interest rates spike (for example, in 2016’s market volatility), which could affect the cost of converting or hedging RMB at that moment. Additionally, regulatory risk should be noted. The Chinese government manages the RMB’s value via a daily reference rate and has in the past imposed measures to curb excessive RMB movements or outflows. While these measures aim for stability, they could, in extreme cases, temporarily make it harder to move funds freely.
Finally, exporters must consider internal challenges. Their own accounting systems need to handle RMB invoicing, and treasury teams must be trained for RMB cash management. Not all firms have multicurrency billing systems ready for RMB, though upgrading is usually straightforward. There may also be a cultural learning curve – understanding nuances of Chinese banking (such as China’s public holidays affecting settlement, or differences between onshore and offshore practices). In short, billing in RMB comes with currency risk that must be managed, potential liquidity and compliance frictions, and the need for proper hedging and systems in place. These challenges are not insurmountable – many can be mitigated with preparation and the support of experienced banking partners – but they do require exporters to be deliberate and informed in their approach to using RMB.
Future Outlook: RMB’s Global Role by 2030
By 2030, the RMB is expected to hold a significantly larger role in global trade and finance, though without displacing the US dollar. Forecasts suggest it could become the world’s third-largest currency, reaching 5–10% of global FX reserves (up from ~3%), overtaking the pound and yen. Its share of global payments and trade finance could double, potentially reaching 8–10% on SWIFT, making billing in RMB a standard option in Asia-to-Asia trade and for deals involving China and commodity exporters.
Energy contracts, Belt and Road projects, and overseas Chinese lending could increasingly be RMB-denominated, creating a full ecosystem of RMB-based trade credits and infrastructure finance. The adoption of the digital yuan (e-CNY) and platforms like mBridge may further streamline RMB cross-border payments, reducing costs and increasing accessibility.
The pace of this growth will depend on gradual capital account liberalisation, political and economic stability, and global confidence in China’s monetary management. For exporters, preparing now, by mastering RMB transactions, managing currency exposure, and leveraging RMB-linked opportunities, will be a strategic advantage in a more multipolar currency world.
The acceleration of yuan internationalisation in 2025 signals a new chapter for global trade. Exporters who engage with this trend can benefit from cost savings, improved market access, and greater strategic flexibility by choosing to bill in RMB where appropriate. Yet, as with any currency, understanding the risks – from FX volatility to regulatory nuances – is crucial. This comprehensive look at the RMB’s rise shows that while the yuan may not displace the dollar soon, it is steadily carving out a larger space in international commerce. Export-oriented businesses should view the RMB not only as China’s currency, but as a growing trade currency that is increasingly embedded in global supply chains and finance.
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