Goods trading in Renminbi settlement has significantly increased, and the cross-border Renminbi business services continue to enhance the real economy's capabilities.

Cross-border RMB settlement in commodity trade has significantly improved, enhancing the ability of cross-border RMB business services to support the real economy continuously. The macro-prudential bureau More companies choosing RMB in cross-border trade settlement can help reduce the impact of exchange rate fluctuations, lower settlement costs, and enhance transaction efficiency and security. In recent years, the People's Bank of China, in accordance with the deployment of the central government and the State Council, has followed the principle of "respecting the market, meeting demand, progressing gradually, and controlling risks." It has aimed to build a new development pattern and promote trade and investment facilitation, with a focus on market-driven, mutual benefit, and balancing development and security. In response to the increasing demand for RMB both domestically and abroad, efforts have been made to increase the proportion of RMB usage in cross-border trade settlements, continuously strengthen the ability of cross-border RMB business services to serve the real economy, and solidify the foundation for the international use of the RMB. Policies for cross-border RMB business have been continuously optimized. Meeting the growing demand for RMB usage in cross-border trade and investment has always been the starting point and focus of the development of the cross-border RMB system. In recent years, the People's Bank of China has focused on facilitating trade and investment, and has introduced several policies to support cross-border RMB usage, improving the convenience of cross-border RMB usage. First, there has been steady progress in pilot projects for settlement facilitation, encouraging banks to streamline settlement processes and provide convenient and efficient cross-border RMB services to enterprises. Currently, the processing time for a single high-quality enterprise's cross-border RMB remittance at banks has generally been reduced to less than 5 minutes. Second, the scope of overseas lending business of banks and financial institutions has been expanded, with clear requirements for handling related business and enhancement of support for overseas operations of enterprises "going global." Third, policies for cross-border RMB business in new trade formats like cross-border e-commerce have been improved to support the continued healthy development of new trade formats. In 2023, the total amount of cross-border RMB settlement for cross-border e-commerce goods trade handled by payment institutions amounted to 947.4 billion yuan, an increase of 24% year-on-year. Fourth, in coordination with the State Administration of Foreign Exchange, policies for the centralized management of cross-border funds of multinational corporations in both local and foreign currencies have been continuously optimized to facilitate the central collection and payment of regular items within multinational enterprise groups and the cross-border transfer of funds in local and foreign currencies, in order to enhance the autonomy in cross-border fund allocation of enterprises, improve the convenience of fund utilization, and reduce the cost of fund utilization. Currently, the integrated local and foreign currency funds pool has been piloted in Beijing, Guangdong, and other places. The international network of RMB usage has been further improved. First, by coordinating the use of local currency swaps, local currency settlements, and RMB clearing banks, and enhancing cooperation with foreign central banks, a favorable environment for cross-border RMB settlement has been created overseas, fostering the development of overseas RMB markets and increasing the acceptance of the RMB by overseas parties. In 2023, the People's Bank of China signed or renewed bilateral local currency swap agreements with central banks of countries such as Saudi Arabia and the UAE, with a total of 31 valid bilateral local currency swap agreements; RMB clearing banks have been established in countries like Brazil, Cambodia, and Serbia, with 33 RMB clearing banks authorized in 31 countries and regions, covering major international financial centers. Second, the service area and level of the Cross-Border Interbank Payment System (CIPS) have expanded, and during the National Day and Mid-Autumn Festival holidays in 2023, for the first time, there were no interruptions in services, providing continuous cross-border RMB payment and settlement services for domestic and foreign customers and fully leveraging the role of the main channel for cross-border payments. As of the end of 2023, CIPS had 139 direct participants and 1,345 indirect participants, with business scope covering 4,442 legal entity bank institutions in 182 countries and regions worldwide. Efforts have been made to create a favorable environment for RMB usage through the joint efforts of all parties. First, in coordination with the Ministry of Commerce, efforts have been made to further facilitate the use of RMB in cross-border trade and investment, support foreign trade enterprises in enhancing their exchange rate risk management capabilities, and better meet the needs of foreign trade enterprises in transaction settlement, investment and financing, risk management, etc. Second, various channels have been used for promotion and publicity to enhance the understanding and awareness of cross-border RMB business among overseas parties. Third, commercial banks are guided to precisely meet the needs of enterprises for cross-border RMB business, providing higher-quality and more convenient cross-border RMB financial services to meet the needs of enterprises. Major commercial banks have increased their support for cross-border RMB business through measures such as increasing the scale of cross-border RMB financing and strengthening assessment incentives. As a result of these efforts, the ability of cross-border RMB business to serve the real economy has been continuously enhanced, and the proportion of RMB usage in cross-border trade settlement has gradually increased. In 2023, the total cross-border RMB payment and receipt amounted to 5.23 trillion yuan, a year-on-year increase of 24.2%, making the RMB the largest settlement currency for cross-border payments in China. Among these, the total amount of cross-border RMB payment and receipt for commodity trade amounted to 1.07 trillion yuan, accounting for 25% of the total cross-border payment and receipt for commodity trade in local and foreign currencies during the same period, an increase of 7 percentage points from 2022. In January 2024, this proportion was 26%, maintaining a high level. According to the latest data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), from November 2023 to January 2024, the proportion of RMB payments in the total global currency payments exceeded 4% for three consecutive months, with the RMB ranking fourth globally in terms of payment currencies for three consecutive months. In the next step, the People's Bank of China will conscientiously implement the deployment of the central financial work conference to steadily and solidly promote the internationalization of the RMB. Based on market-driven principles and the voluntary choice of enterprises, development and security will be coordinated, focusing on trade and investment facilitation to create a more favorable policy system and market environment for RMB usage, better serving the real economy and high-quality development. First, optimize policies for cross-border RMB business. Focused on trade and investment facilitation, strengthening coordination between local and foreign currencies on the basis of "local currency priority," continuously optimizing the basic arrangements for cross-border RMB trade settlement and other systems, providing enterprises with more friendly and diversified currency choices, enhancing the ability of cross-border RMB business services to support the real economy. Second, improve the network infrastructure for RMB usage. Strengthen the construction of the cross-border RMB payment system, enhance the functions of clearing banks, optimize the global layout of clearing banks, and improve the efficiency and security of RMB clearing. Based on risk prevention and control, better leverage the role of currency swap mechanisms in supporting cross-border trade and investment. Third, further strengthen coordination and cooperation with various departments, enhance promotion and publicity, guide financial institutions to optimize the process of cross-border RMB business handling, improve service quality and efficiency, and focus on addressing the difficulties and bottlenecks in the process of enterprise cross-border trade settlement. The fourth is to strengthen the supervision of cross-border RMB business. Strengthen the construction of on-site and off-site monitoring and non-face-to-face inspection capabilities, and strengthen on-site inspection work. Further improve the assessment and early warning system for cross-border fund flows, improve the integrated macro-prudential management framework for cross-border fund flows in local and foreign currencies, enrich the toolbox for macro-prudential management, strengthen the coordination between macro-prudential management and micro-supervision, enhance the management and risk control capabilities of cross-border fund flows under open conditions, and hold the bottom line against the occurrence of systemic financial risks. This article is translated from the People's Bank of China, GMT editor: Li Cheng.