China is accelerating efforts to expand the global influence of the renminbi, moving beyond trade settlements to build a comprehensive financial ecosystem capable of attracting international investors, facilitating cross-border financing and strengthening the currency’s position as a global reserve asset.
Beijing’s strategy reflects a recognition that persuading trading partners to conduct transactions in renminbi is only one part of the broader ambition to internationalise the currency. For the renminbi to compete more effectively with established international currencies, China must provide deeper financial markets, sufficient liquidity, diverse investment instruments and reliable mechanisms for managing currency and interest rate risks.
The authorities are therefore expanding investment opportunities, developing derivatives and hedging instruments, facilitating foreign participation in renminbi-denominated debt markets and strengthening the infrastructure for cross-border payments and settlements.
The campaign is advancing across four major areas: offshore investment products, financial risk management, international financing and cross-border payment systems.
Expanding Offshore Investment Opportunities
One of Beijing’s priorities is to increase the availability of renminbi-denominated investment products outside mainland China, particularly in Hong Kong, which serves as a major offshore financial centre for the currency.
Chinese authorities are considering increasing the scale and frequency of government bond issuance in Hong Kong to establish a more reliable yield curve. Such a development could provide international investors with clearer benchmarks for pricing renminbi-denominated financial assets and encourage broader participation in the market.
Hong Kong is also examining the introduction of short-term renminbi debt instruments and plans to launch a redesigned renminbi-denominated gold futures contract.
These initiatives are intended to deepen the market for renminbi assets and offer investors more opportunities to diversify their portfolios.
Tommy Wu, a senior economist for Greater China and North Asia at Standard Chartered in Hong Kong, said the next phase of policy development would likely focus on accelerating the growth of renminbi asset markets.
He identified the challenge as finding ways to capitalise on global investors’ growing demand for diversification and persuade them to increase their holdings of renminbi-denominated assets.
Developing Derivatives and Hedging Instruments
Beyond expanding investment products, China is working to address the financial risks that could discourage international investors from holding substantial amounts of renminbi.
Currency fluctuations, interest rate changes and limited opportunities to hedge against losses can make investments in a foreign currency less attractive, particularly for institutions managing large portfolios.
To address these concerns, Chinese authorities are expanding a major derivatives trading link with Hong Kong to give foreign investors access to additional onshore interest rate products.
In August, they also introduced a new set of government bond futures in Hong Kong, providing international investors with another instrument for managing exposure to changes in bond prices and interest rates.
Tommy Xie, head of Asia macro research at Oversea-Chinese Banking Corporation in Singapore, argued that institutions would be reluctant to maintain substantial renminbi balances without appropriate instruments offering suitable duration, liquidity and risk management.
He noted that the challenge was not simply to increase the supply of renminbi assets but to establish a complete financial framework connecting assets, liabilities and hedging instruments.
The development of such a framework could help reduce the risks associated with holding the currency and make renminbi-denominated investments more attractive to international financial institutions.
Making the Renminbi a Financing Currency
China is also seeking to expand the use of the renminbi in international borrowing by improving access to domestic and offshore debt markets.
A major component of this strategy is the promotion of panda bonds, which are renminbi-denominated debt securities issued in mainland China by foreign governments, companies and other entities.
Beijing plans to make the issuance and trading of these securities more accessible to overseas borrowers, potentially enabling foreign institutions to raise funds in China’s domestic financial market.
Hong Kong, meanwhile, is encouraging further issuance of dim sum bonds, which are renminbi-denominated securities issued outside mainland China.
The city also aims to develop a more comprehensive range of maturities for dim sum bonds, allowing borrowers to access financing over different periods and giving investors greater flexibility in managing their portfolios.
Increasing the availability of renminbi financing could reduce dependence on other currencies for some international borrowing transactions while expanding the currency’s role in global capital markets.
However, sustained growth will depend on whether overseas borrowers find renminbi financing competitive and whether investors have sufficient confidence in the currency to purchase and retain the resulting securities.
Strengthening Cross-Border Payments and Settlement
China’s expanding cross-border payment infrastructure is another important pillar of its internationalisation strategy.
The annual value of transactions processed through China’s cross-border renminbi payment and settlement system reached 180.2 trillion yuan, equivalent to approximately S$34.5 trillion, in 2025, almost four times the level recorded a decade earlier, according to data compiled by Bloomberg.
The Cross-Border Interbank Payment System (CIPS) is helping companies and financial institutions conduct renminbi transactions outside mainland China, supporting the currency’s use in international trade and financial activities.
Standard Chartered’s Wu said China could further expand the use of CIPS for cross-border clearing and settlement while promoting cross-border QR code payments, particularly with countries in the Association of Southeast Asian Nations (ASEAN).
Greater adoption of these payment channels could make renminbi transactions more convenient for businesses and consumers while strengthening the financial connections between China and its trading partners.
The expansion of payment infrastructure is particularly significant because the international use of a currency depends not only on its acceptance in commercial transactions but also on the ease, speed and reliability with which payments can be processed across borders.
A Long Road to Global Currency Status
Despite the progress, China faces significant challenges in its ambition to establish the renminbi as a more influential international currency.
Increasing transaction volumes and expanding payment networks do not automatically translate into widespread use of a currency as a global reserve asset. Central banks, institutional investors and multinational corporations must also have confidence in the currency’s stability, the accessibility of its financial markets and their ability to move capital when necessary.
The depth and liquidity of financial markets, the availability of reliable investment instruments and the ability to manage currency risks will therefore remain critical to the renminbi’s international prospects.
China’s latest initiatives suggest that Beijing is increasingly focused on addressing these structural requirements rather than relying exclusively on trade agreements and bilateral settlements.
By expanding offshore investment opportunities, developing hedging instruments, opening financing channels and strengthening cross-border payment systems, the country is attempting to make the renminbi more useful across a broader range of international financial activities.
