New phrase, new phase? China’s central bank adjusts language on yuan internationalisation

China’s central bank has adopted a more proactive tone when describing its efforts to promote the global use of the yuan – a rhetorical change that could signal increased efforts to internationalise the currency amid growing concerns over the US dollar.

At a recent meeting, People’s Bank of China Governor Pan Gongsheng pledged to “promote the internationalisation of the yuan”, a noticeable shift in tone from earlier statements by central bank officials, which typically referred to “prudently and steadily advancing the yuan’s internationalisation”.

The bank would “promote the yuan’s internationalisation, boost its use in trade, further open up financial markets in a gradual and orderly way, and support the growth of offshore yuan markets”, Pan said during a meeting of the central bank’s Communist Party committee on Friday.

Since late 2020, the People’s Bank of China had previously tended to describe its approach using the phrase: “prudently and steadily advancing the yuan’s internationalisation”.

Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered, said the use of the new phrase was a signal from Beijing that it would become more active in promoting the global use of the yuan over the next five years.

“It doesn’t mean a radical shift,” Ding said. “The People’s Bank of China is likely to do more foundational work, such as improving the infrastructure and facilitating the yuan’s use in trade and investment to make it easier for overseas investors to hold the currency.”