What renminbi internationalisation means for you in a new world order

Discover how renminbi internationalisation is transforming global trade finance and why now is the time to diversify.

25 June 2025

8 mins

Corporate & investment bankingCorporate strategy

Renminbi internationalisation has gained remarkable momentum in recent years, as China’s role in global trade and finance continues to expand.

The renminbi is now the second most-used currency in world trade finance and fourth in payments, underscoring its rise to prominence in the past decade. Standard Chartered’s Renminbi Globalisation Index (RGI), a proprietary measure of international renminbi usage, rose for the fifth straight month in April to an eight-month high of 5,165 – up 8.3% year-to-date.

This momentum has persisted despite renewed US-China trade tensions and tariffs. In the second quarter, when tensions were at their peak, the renminbi appreciated 0.8 per cent against the dollar, as trade flows remained resilient and ongoing structural reforms reinforced its expanding global role.

Against this backdrop, corporates and financial institutions are making strategic, and demand-led decisions to reduce reliance on the dollar, driven by shifting trade corridors, rising tariffs and heightened FX volatility. Renminbi internationalisation has evolved and is now more actively considered than ever by international governments, financial institutions and corporates as part of a broader global recalibration.

Businesses around the world are also seeing benefits as they incorporate the renminbi into their cross-border operations. Beyond reduced FX risk and lower financing costs – advantages already seen by firms directly linked to China – the renminbi is emerging as a leading tool for cross-border settlement, trade finance and risk management.

How trade tensions underpin renminbi adoption

This is happening as geopolitical tensions increase and trade dynamics shift. In response, China is aligning itself with new trade routes and strengthening its ties with emerging markets. This, combined with more established strategies like the Belt and Road Initiative, is underpinning renminbi-denominated trade, especially in countries like Indonesia and Malaysia. Cross-border renminbi volumes surged in early 2025 as businesses managed tariff costs and currency risks.

At the corporate level, this trend is even more pronounced. Businesses facing rising costs from tariffs are opting for renminbi settlements to gain greater control and reduce their exposure to currency volatility. In parallel, multinational corporates are diversifying their trade finance, adopting the renminbi for genuine trade settlement with Chinese counterparties, as they seek to align more closely with the realities of their supply chains.

Case study

Mitigating trade risk and supporting green goals with UK’s first renminbi import letter of credit for Chinese EV subsidiary

A UK-based subsidiary of a leading Chinese automaker required a robust trade finance solution to support its operations, mitigate international trade risks, and prioritise the production of electric and plug-in hybrid vehicles as part of their zero-emission commitment. Standard Chartered provided an import letter of credit facility, marking the first renminbi import letter of credit issued in the UK. The solution included sustainable finance limit, with reduced commission fees tied to environmental targets, and FX hedging limits to manage currency risks. This enabled the client to efficiently manage imports, achieve environmental goals, and drive growth and sustainability.

Trade blocs turbocharge renminbi adoption

These moves are supported by evolving multilateral trade frameworks, like the Regional Comprehensive Economic Partnership and the expanding cooperation among BRICS nations. These promote the use of local currencies in cross-border trade, making renminbi a natural choice, given China’s prominence as a global exporter.

For businesses operating within these blocs, renminbi-denominated settlement and financing are strategic tools. They help reduce foreign exchange risks, simplify transaction processes and create more flexible funding opportunities.

Case study

Unlocking trade-driven growth and cost savings with Africa’s first five-year renminbi term loan for digital TV provider in Uganda

A leading pay-to-watch TV provider in Uganda needed financing to purchase equipment from China as part of its expansion strategy. Standard Chartered Uganda responded by delivering Africa’s first five-year renminbi term loan for a corporate client, structured via intragroup lending from Standard Chartered Mauritius and Hong Kong. This enabled the client to lower borrowing costs and benefit from favourable renminbi exchange rates, demonstrating how renminbi financing can unlock opportunities for trade-driven growth in frontier markets.

Capital market reforms make access easier for global investors

Regulation is also evolving rapidly. In March, authorities enabled Northbound Bond Connect investors to use eligible onshore Chinese bonds as collateral for offshore renminbi bond repo transactions in Hong Kong, a significant step for cross-border financial integration. This enhances liquidity management for global investors and further cements Hong Kong’s status as the world’s premier offshore renminbi hub; and also underscores a broader strategy to internationalise the renminbi and strengthen Hong Kong’s role as an international finance centre.

Alongside this, China continues to make meaningful strides in opening its capital markets. Key initiatives, including the Qualified Foreign Investor scheme, CIBM Direct and the Connect programmes (Bond Connect, Stock Connect, Swap Connect), have enhanced cross-border access.

Digital currencies could accelerate the renminbi’s global role

As digital transformation reshapes global payments, initiatives like China’s Digital renminbi (e-CNY) and the rise of Central Bank Digital Currencies (CBDCs) are creating new pathways for renminbi internationalisation. While still in its early stages, the e-CNY holds clear potential to enable faster, more secure and cost-effective cross-border transactions.

With more economies exploring CBDCs, digital currencies are emerging as viable tools for currency diversification and real-time settlement. We see this evolution supporting greater renminbi use in trade and finance, particularly as businesses look to strengthen liquidity management and reduce reliance on dollar-based flows.

How China’s Cross-Border Interbank Payment System is enabling cross-border renminbi flows

China’s Cross-Border Interbank Payment System (CIPS) is playing a pivotal role in enabling efficient renminbi flows across borders. Designed to support the clearing and settlement of renminbi-denominated transactions, CIPS is evolving into a core component of global payment infrastructure.

In 2024, CIPS processed 8.2 million transactions totalling RMB 175.5 trillion, marking year-on-year growth rates of 24 per cent in transaction volume and 43 per cent in value. The system now has a global network that includes nearly 1,500 indirect participants, most of which are overseas banks.

With ongoing enhancements to support international standards like ISO 20022, CIPS is making renminbi payments faster, more transparent and easier to integrate into global treasury operations.

For corporates, this presents a growing opportunity: more seamless, cost-effective renminbi settlements and greater access to China’s financial ecosystem. We are uniquely positioned to support this. As one of the first foreign banks to become a CIPS Direct Participant in both Mainland China and, more recently, Hong Kong, we offer faster turnaround times through direct settlement capabilities, lower transaction fees and extended cut-off times.

Our direct participation enables clients to benefit from an ever-streamlined, responsive and cost-efficient renminbi settlement process. As demand for renminbi services grows, partnering with Standard Chartered provides a practical and strategic route to capitalise on the currency’s expanding global role.

Capitalising on renminbi internationalisation

Corporates and FIs are increasingly using renminbi in settlement, investment and financing. Our deep expertise and global network position us to help clients leverage this. From clearing and settlement to cross-border financing and digital innovation, we provide tailored solutions for those navigating the renminbi’s global ascent.

Case study

Reducing FX risk and enhancing cost efficiency with dual Chinese Yuan (CNY) rates for Singapore-based agribusiness trading with China

We structured dual FX pricing in both offshore and onshore CNY for a global agribusiness based in Singapore, helping the client to reduce FX risk as it shifted soybean trade with China into renminbi. By tailoring pricing to the underlying trade flows, the client gained access to more favourable onshore CNY rates through our offshore network, achieving cost savings and enhanced risk management in a volatile market.

Unlock the opportunities in renminbi today

In a world marked by uncertainty, renminbi internationalisation offers clarity, opportunity and a new direction for global trade and finance. Now is the time to act and position your business at the forefront of this historic shift.

Find out more about renminbi opportunities with Standard Chartered.

Financial Institutions

Corporates