RMB on the rise: Powering the China-ASEAN corridor

The internationalisation of the renminbi is helping create new trade, investment and finance opportunities.

Briefing 3: China-ASEAN corridor

19 September 2025

6 mins

Consumer and retailAutomotiveCorporate & investment banking

As global supply chains are redrawn, China and ASEAN are entering a new phase in their economic relationship. The trade corridor connecting them – which is going from strength to strength amid international turbulence – is evolving into a more integrated partnership, underpinned by green innovation and rising regional hubs.

At the same time, Chinese enterprises are investing heavily in ASEAN economies, targeting next-generation sectors, such as electric vehicles, and supporting the expansion of consumer-facing brands – reshaping trade and investment patterns.

ASEAN is China’s largest trading partner, and has been for 16 years, with trade reaching USD597 billion in the first seven months of 2025, an increase of 8.2 per cent year-on-year, according to Vice Commerce Minister Yan Dong.

Against this backdrop, the renminbi’s (RMB) growing role as an international currency is widening the corridor, creating new pathways for trade, investment and finance – especially crucial in the face of rising protectionism.

In fact, US-China trade tensions and tariffs have demonstrated the RMB’s resilience and its role as a structural financial anchor and enabler of cross-border growth. Our Renminbi Globalisation Index, that measures the use of RMB in global markets, climbed for the fifth straight month in April 2025, reaching an eight-month high of 5,165, before easing slightly.

Global businesses are increasingly seeking alternatives to the US dollar as trade and geopolitical uncertainty persist. In June 2025, the RMB maintained its position as the world’s sixth most active currency for global SWIFT payments by value, accounting for 2.9 per cent of transactions. Overall, RMB payments grew 2.6 per cent from May, underscoring growing trust in the currency as a settlement mechanism.

Stronger China-ASEAN ties

This is translating directly into regional flows, with China and ASEAN significantly expanding RMB-based investment and trade. In 2024, cross-border RMB settlement volumes between China and ASEAN grew 35 per cent, with RMB payments representing 28 per cent of total bilateral trade.

Currency agreements are another clear indicator of increased economic cooperation. Indonesia – one of the founding members of the ASEAN region – and China signed an upgraded Local Currency Settlement agreement in May. Similar frameworks with Vietnam have facilitated deeper trade integration, with trade between the two climbing to 1.85 trillion yuan (USD254 billion) in 2024.

Stronger ties between ASEAN and China are creating structural demand for RMB that goes beyond convenience. This relationship is underpinned by the Regional Comprehensive Economic Partnership (RCEP), which has accelerated regional supply chain integration. Since RCEP’s inception, trade in intermediate goods between China and ASEAN has risen to 67 per cent of total trade volume. Meanwhile, the ASEAN-China Free Trade Area 3.0, set to be signed in October 2025, is likely to strengthen ties further.

ASEAN and China have long been each other’s largest trading partners and now we are seeing this in sectors like electric vehicles, digital finance and consumer brands, where Chinese companies are expanding across the region

Sunil Kaushal

Co-Head of Corporate & Investment Banking, Standard Chartered

Closer integration is also reflected in investment flows and the movement of Chinese enterprises into the ASEAN region, particularly in sectors like electric vehicles. Tech conglomerate BYD, for instance, has expanded rapidly, lifting its ASEAN-6 market share from 0.1 per cent in 2022 to 1.8 per cent in 2024. BYD has established manufacturing facilities in Thailand with an annual production capacity of 150,000 vehicles and is building a USD1 billion factory in Indonesia.

Meanwhile, consumer-facing industries are pivoting towards ASEAN’s 700 million-strong market, highlighting the corridor’s shift from an export-led to a regionally integrated model. Consumer brands are expanding across ASEAN, creating more demand for RMB-denominated transactions, and Asia remains the leading destination for Chinese overseas mergers and acquisitions, with investments in ASEAN countries rising 13 per cent year-on-year in 2024.

Food and beverage chains are also growing. Popular tea brand Chagee had opened 156 stores across Malaysia, Singapore and Thailand by the end of 2024, while fast food chain Mixue has over 2,600 stores in Indonesia.

This shift towards serving regional consumers represents an evolution in the corridor, moving from export-oriented manufacturing towards integrated economic development.

RMB as a regional anchor

The RMB is playing an increasingly important role in ASEAN’s financial landscape. Singapore has emerged as a key hub for RMB liquidity and, over the past four years, RMB deposits in Singapore have doubled, increasing from RMB134 billion (USD18.8 billion) in 2020 to RMB276 billion (USD38.7 billion) in 2024.

Singapore is also critical for Chinese fintech expansion, serving as a treasury centre for many companies. Its mature digital asset market has attracted China’s blockchain player Wanxiang Blockchain Group and others.

Mutual access programmes like the ETF Connect schemes in ASEAN, starting with Singapore and expanding to Thailand, demonstrate the Chinese government’s clear commitment to fostering closer economic relations with the region. These initiatives also increase interest from Chinese investors in ASEAN markets, contributing to growth.

The ongoing development of digital payment infrastructure, combined with expanding trade volumes and investment flows, suggests that RMB internationalisation will continue to strengthen China-ASEAN economic ties.

To put this in perspective, China’s cross-border RMB settlement reached a record high of RMB12.7 trillion (USD1.78 trillion) in December 2024, up from RMB12.4 trillion (USD1.74 trillion) in September, according to data from the People’s Bank of China, reflecting the currency’s growing role in global trade and finance.

A resilient and dynamic corridor

The internationalisation of the RMB is emerging as a structural force that’s reshaping the China-ASEAN corridor. By deepening trade ties and enabling new investment flows, the currency is strengthening financial connectivity across markets.

For businesses, investors and policymakers, this presents both opportunities and challenges, unlocking the benefits of closer integration while requiring adaptation to greater currency diversification and evolving financial architectures.

Looking ahead, with strong government support and rising demand from businesses, the use of the RMB in ASEAN is set to continue its expansion. Driven by regional economic integration, improved trade relationships and the shared pursuit of financial stability and efficiency, the currency is likely to underpin stronger financial links and reinforce a more resilient, dynamic China-ASEAN corridor.