Milestone: Yuan Overtakes Dollar as China’s Most Used Cross-Border Currency for the first time in March 2023

[beijingwalker]

Milestone: Yuan Overtakes Dollar as China’s Most Used Cross-Border Currency for the first time in March 2023​

• Local currency’s share of China transactions rises to record
• Share in global transactions was little changed in March

By Bloomberg News
2023年4月26日 GMT+8 下午1:15

China passed another milestone in its bid to reduce reliance on the dollar, as yuan usage in its cross-border transactions jumped ahead of the greenback’s for the first time in March.

The local currency’s share of China’s cross-border payments and receipts rose to a record high 48% at the month end from nearly zero in 2010, according to research by Bloomberg Intelligence citing data from the State Administration of Foreign Exchange. The dollar’s share declined to 47% from 83% over the same period, the figures showed.

The ratio is calculated based on the volume on all types of transactions, which includes securities trading through the links between mainland China and Hong Kong’s capital markets. It doesn’t represent transactions used by the rest of the world — the yuan’s share in global payments was little changed at 2.3% in March, according to Swift.

“The rise in yuan usage could be a natural consequence of China opening up its capital account, with rising inflows for China bonds and outflows for Hong Kong stocks,” Stephen Chiu, chief Asia foreign-exchange and rates strategist at Bloomberg Intelligence (BI) research wrote in a note.

The rising share allows local firms to reduce the risks of currency mismatch in transactions, a spokeswoman at the State Administration of Foreign Exchange said at a Friday (April 21) briefing. China will further expand yuan settlement in cross-border transactions, the State Council said in a guideline aimed at boosting foreign trade issued Tuesday.

Yuan Overtakes Dollar as China’s Most Used Cross-Border Currency

China passed another milestone in its bid to reduce reliance on the dollar, as yuan usage in its cross-border transactions jumped ahead of the greenback’s for the first time in March.

www.bloomberg.com

 

[beijingwalker]

Yuan overtakes dollar to become most-used currency in China's cross-border transactions​

The yuan was used in 48.4% of all cross-border transactions, Reuters calculated, while the dollar's share declined to 46.7% from 48.6% a month earlier

Reuters News

April 26, 2023

SHANGHAI - The yuan became the most widely-used currency for cross-border transactions in China in March, overtaking the dollar for the first time, official data showed, reflecting efforts by Beijing to internationalise use of the yuan.

Cross-border payments and receipts in yuan rose to a record $549.9 billion in March from $434.5 billion a month earlier, according to Reuters calculation based on data from the State Administration of Foreign Exchange.

The yuan was used in 48.4% of all cross-border transactions, Reuters calculated, while the dollar's share declined to 46.7% from 48.6% a month earlier.

The volume of cross-border transactions covers both the current and capital accounts.

China has long been promoting the use of yuan to settle cross-border trades as part of an efforts to internationalise the use of its currency.

The yuan's use in global trade finance remains low, though it has shown steady increases.

Data from SWIFT showed that the yuan's share of global currency transactions for trade finance rose to 4.5% in March, while the dollar accounted for 83.71%.

Yuan overtakes dollar to become most-used currency in China's cross-border transactions

The yuan was used in 48.4% of all cross-border transactions, Reuters calculated, while the dollar's share declined to 46.7% from 48.6% a month earlier

www.zawya.com

 

[Foinikas]

Somebody had a crazy orgasm.

 

[beijingwalker]

Somebody had a crazy orgasm.

We are seeing it, you just jumped in with pants down.

 

[Foinikas]

We are seeing it, you just jumped in with pants down.

Why would I be excited about it? You're the one who's using the Yuan.

 

[Get Ya Wig Split]

yawn also yuan is trash and so is China

 

[jhungary]

I just have one question.

Did the OP know what is Cross Border Transaction?

Somebody had a crazy orgasm.

What are cross border transactions?

Find out what cross border transactions are, the issues that arise with them, and how to make cross border transactions easier.

wise.com

This is actually something bad for business.....

Cross Border Transactions essentially is the payment coming from a country that is outside the seller's country. Say if I am selling cloth in China and someone buy them in Italy, they pay me using their Italian Credit Card. That's a cross border transaction. I will be the one that took the hit on fees, because they would need to send their money from their Italian bank account to my Chinese account via multiple party, and all of them took a cut, or you use something like Paypal which skim off 7 (or 9% I don't remember) on top of that price.

Most people deal with Ebay knows what is Cross Border Transactions........

For a business owner, you ALWAYS want your buyer to pay locally. Even if that is from another country, because I, as a seller, don't want to lose fee thus lower the profit margin........

 

[VCheng]

Somebody had a crazy orgasm.

At this?

It doesn’t represent transactions used by the rest of the world — the yuan’s share in global payments was little changed at 2.3% in March, according to Swift.

Premature celebration?

 

[jhungary]

At this?

Premature celebration?

That's because cross border trade does not really affect currency strength, in fact, it shows the trading sector is on its weakness. YOU NEVER WANTED TO HAVE CROSS BORDER TRADE, if you sell it overseas, you want them to close it out with your local financial institution or have a direct payment.

If you ever sold anything from Ebay you will know, you have less a profit margin if you sell it to an overseas buyer because both Ebay and PayPal will take a big cut on your sales when they pay with their credit card on another country, Ebay or Paypal don't charge the buyer for fee, they charge the sellers..

This is not the same as I don't want to sell it overseas, but rather you want them to pay with your own method of payment.

 

[VCheng]

That's because cross border trade does not really affect currency strength, in fact, it shows the trading sector is on its weakness. YOU NEVER WANTED TO HAVE CROSS BORDER TRADE, if you sell it overseas, you want them to close it out with your local financial institution or have a direct payment.

If you ever sold anything from Ebay you will know, you have less a profit margin if you sell it to an overseas buyer because both Ebay and PayPal will take a big cut on your sales when they pay with their credit card on another country, Ebay or Paypal don't charge the buyer for fee, they charge the sellers..

This is not the same as I don't want to sell it overseas, but rather you want them to pay with your own method of payment.

So the OP DEFINITELY has Premature Celebration Syndrome?

 

[大汉奸柳传志]

all China's major trading partners are happy to accept Yuan payment -something India could not pull off cause no one wants INR.

 

[jhungary]

So the OP DEFINITELY has Premature Celebration Syndrome?

I don't know, but this is nothing to celebrate unless China adopt a Ebay style sales platform for wholesale...

I mean, this is still okay if I have a necklace and I want it to be sold and I don't care who gets it as long as I have the money, so yes, I will put it on ebay and sell it because anything greater than 0 works for me. If I can sell it in Australia, good, I get more money, if not, I can still sell.

It's not the case if I am a manufacturer of necklace and I have thousand if not million of those necklace for sales, e.g. if I am a Chinese Wholesaler of necklace, because for every necklace there is going to be a fee associated with. The more I sell that way the more fee it accumulated. Most people in manufacturing if they want to sell overseas, they would have a local bank account in that country to take payment, say if I make Necklace in Australia and I intended to sell them in the US, I would have an US Bank Account, because that does not have that much fee associated with those transaction and it's a 1 off payment to transfer fee from my US Bank account to my Australian Bank account, that way I earn more....

 

[uhuru]

At this?



Premature celebration?

His engine went off half cocked... i guess he did not take much of the blue pill. ginseng did not work .

 

[jhungary]

all China's major trading partners are happy to accept Yuan payment -something India could not pull off cause no one wants INR.

This is not about accepting Yuan as payment, this is about the payment has a different origin than the sale of goods. If you want people to pay in Yuan, you have them open an account in China and trade in Yuan.

This is about a Chinese sells to an American, and the American pay with an American Credit Card. They are still paying US dollars, just that it will take you 7 or 8 hits from bank to bank before that money goes into your bank account in Yuan, you tell me if this is good for you??

 

[大汉奸柳传志]

This is not about accepting Yuan as payment, this is about the payment has a different origin than the sale of goods. If you want people to pay in Yuan, you have them open an account in China and trade in Yuan.

This is about a Chinese sells to an American, and the American pay with an American Credit Card. They are still paying US dollars, just that it will take you 7 or 8 hits from bank to bank before that money goes into your bank account in Yuan, you tell me if this is good for you??

US may not be a good example here due to the inevitable decoupling, but I suppose what remains of China-US bilateral trade could still go through SWIFT in the future