China sets sights on greater yuan use in Asean, takes pragmatic approach combating US dollar hegemony
- Association of Southeast Asian Nations (Asean) has surpassed the European Union and the US to become China’s largest trading partner
- People’s Bank of China also plans to promote direct trading with other currencies, while supporting overseas economies in developing yuan foreign exchange markets
China will place an emphasis on yuan currency settlements with neighbouring countries and the development of offshore centres as its next steps to promote the greater use of the Chinese currency overseas, its central bank said.
The down to earth assessment from the People’s Bank of China (PBOC) comes as the yuan’s international acceptance remains too small to challenge US dollar hegemony.
We will focus on enhancing the convenience of the yuan in cross-border trade and investment, and prudently promote the globalisation of the yuan
“Currency internationalisation is a long-term process,” the central bank said in a statement over the weekend.
“Based on the principles of respecting the market and responding to demand, gradual and controlled risks, we will focus on enhancing the convenience of the yuan in cross-border trade and investment, and prudently promote the globalisation of the yuan.”
The PBOC will explore the possibility of yuan currency settlements with Association of Southeast Asian Nations (Asean) member countries, as well as China’s neighbours.
It also plans to promote direct trading of the yuan with other currencies, while supporting overseas economies in developing yuan foreign exchange markets.