China News Service, Beijing, July 24 (Reporter Xia Bin) "Renminbi Internationalization Report 2021" (hereinafter referred to as the "Report") was released in Beijing on the 24th.

The report shows that by the end of 2020, the RMB Internationalization Index (RII) reached 5.02, a sharp increase of 54.20% year-on-year.

  RII was compiled by the International Monetary Institute (IMI) of Renmin University of China and officially disclosed in the first "Renminbi Internationalization Report" in 2012 to objectively describe the actual use of RMB in international economic activities.

Through this index, it is possible to understand the development of the RMB’s international currency functions in terms of trade valuation and settlement, financial transactions and official reserves.

  The report released on the 24th stated that the substantial growth of RII benefited from three aspects.

First, the RMB international trade pricing and settlement function continued to be consolidated.

In 2020, the RMB settlement value of cross-border trade under the current account reached 6.77 trillion yuan (RMB, the same below), an increase of 12.09% year-on-year; worldwide, the share of RMB settlement in international trade was 2.91%, an increase of 18.40% over the previous year .

  Second, the functions of RMB financial transactions have been significantly enhanced.

As the global direct investment continues to be sluggish, the scale of direct investment in RMB in 2020 will reach 3.81 trillion yuan, a year-on-year increase of 37.05%, the fastest growth rate in the past five years; by the end of 2020, direct investment, international credit, international bonds and bills, etc. The jointly decided RMB international financial denominated transactions accounted for 9.89% of the total, a year-on-year increase of 84.23%, becoming the main driving force for the rise of RII.

  Third, the function of RMB's international reserve has further emerged.

At present, more than 70 foreign central bank institutions have entered the Chinese inter-bank bond market, and the monetary authorities of more than 75 countries and regions have included the renminbi in their foreign exchange reserves; in the fourth quarter of 2020, the share of renminbi assets in the global official foreign exchange reserves reached 2.25% , A year-on-year increase of 14.80%; the relative share of RMB in SDRs was 10.83%, rebounding to basically the same as the initial weight.

  Wang Fang, deputy dean of the School of Finance of Renmin University of China and deputy director of IMI, said that theoretical analysis and historical experience show that a high-level domestic and international economic cycle can support the high-level international use of sovereign credit currency.

Accelerating the formation of a new dual-cycle development pattern will create a major historical opportunity for the internationalization of the RMB to reach a new level.