The survey shows that the Chinese government’s internationalization campaign of the yuan, pushed by President Xi himself, is working. The number of overseas businesses willing to hold yuan deposits grew to a five-year high, supported by the currency’s “relatively stable purchasing power.”
Key Takeaways:
Bank of China found that 95% of foreign firms plan to sustain yuan use, boosting cross-border market volume.Willingness to preserve yuan deposits hit a 5-year, in line with Xi Jinping’s target of reaching reserve status.Only 4.1% of the firms surveyed expected to drop yuan usage.China is pushing to increase the use of its fiat currency, the Chinese yuan, internationally, and it seems the campaign is yielding results.
34.5% expected yuan-based settlements to increase, while 61.4% stated that there would be no change in their yuan transactions. Also, only 4.1% of the companies surveyed expected their yuan settlements to decline, down from over 20% last year, showing confidence in the yuan’s rising adoption.
The survey was conducted in February and encompassed 3,501 businesses, including 2,488 domestic and 1,013 located overseas.
Another positive finding of the survey was a rise in businesses willing to hold yuan deposits over time to conduct business with their Chinese counterparts. The metric rose to over 30%, reaching a 5-year high, up 6.4% from last year, supported by the “relatively stable purchasing power” of the yuan, according to these companies.
The Chinese yuan’s value, unlike other fiat currencies that can float freely, is controlled by the People’s Bank of China, which has allowed it to appreciate over the past months. This answers to an internationalization campaign that has been pushed from the highest echelons of power.
PBOC Governor Pan Gongsheng is supportive of this push, stating that this was “an integral part of the overall process of reforms and openness of China,” as experts expect the yuan to keep rising over the next 5 years.
