, July 7 Topic: Report: The development of RMB cross-border business in 21 generally presents three characteristics

Zhongxin financial reporter Xia Bin

The China Banking Association announced on the 21st that its Trade Finance Professional Committee recently released the "RMB Internationalization Report (2023-2022)" (hereinafter referred to as the "Report") at the 2023 meeting of all members, sorted out the progress of RMB internationalization policies from 2022 to the first half of 2023, introduced the development of RMB internationalization in 2022, analyzed the challenges and opportunities faced by RMB internationalization, and summarized the policy recommendations put forward by the industry for the internationalization of RMB.

This is the seventh time that the China Banking Association has released a report on RMB internationalization since 2016. The report is led by the Agricultural Bank of China, the Deputy Director of the Commission and co-authored by 11 Standing Committee members, including China Development Bank, Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Bank of Communications, China CITIC Bank, China Everbright Bank, China Merchants Bank, Shanghai Pudong Development Bank, China Minsheng Bank and HSBC (China).

The report points out that since 2022, in order to promote the internationalization of RMB in an orderly manner, People's Bank of China and other departments have actively issued relevant policies to further promote trade and investment facilitation, and encourage market entities to better play the functions of RMB cross-border settlement, investment and financing. In terms of promoting the opening up of financial markets, China has launched a number of measures to further improve its legal and policy framework, build a two-way opening pattern, and make remarkable progress in institutional opening-up.

According to the report, in 2022, the development of RMB cross-border business generally presents three characteristics. First, cross-border RMB settlement of trade and direct investment continues to maintain rapid growth, with RMB accounting for nearly 50% of the total cross-border receipts and payments in domestic and foreign currencies, and has become the largest commonly used currency in China's cross-border balance of payments.

Second, securities investment business continues to be a supporting force for the growth of cross-border use of RMB. According to People's Bank of China statistics, in 2022, the total amount of RMB cross-border receipts and payments in the country will be 42 trillion yuan, of which 10.52 trillion yuan will be paid for current accounts, 31.62 trillion yuan for capital accounts, and the amount of securities investment receipts and payments will account for 75% of the amount received and paid by capital accounts.

Third, the RMB internationalization infrastructure has been further improved, and the CIPS system has played a more important role in RMB cross-border payment and clearing services. By the end of 2022, there were 1360,2021 participants in the CIPS system, an increase of 101 compared with 440; The CIPS system processed a total of 31.7 million payments throughout the year, a year-on-year increase of <>.<>%.

The report shows that since 2022, while the internationalization of RMB has made positive progress, it still faces many challenges. From the perspective of the external environment, the international political pattern has been violently turbulent, the game of great powers has intensified, and multiple crises have overlapped, which has aggravated the international energy and food crises, which in turn has increased the global inflationary pressure and the risk of economic recession. In order to alleviate high inflation, different countries have implemented different monetary policies, resulting in fluctuations in the interest rate differential and exchange rate of RMB against major currencies in the world, thus bringing challenges to the internationalization of RMB.

From the perspective of the internal environment, the downward pressure on the domestic economy continues to increase, and the national GDP growth rate in 2022 is lower than that in 2021; In 2023, the triple pressure of demand contraction, supply shock, and expected weakening is still large, and due to the "scar effect" of the epidemic, the pressure of youth employment, and the insufficient momentum of consumption recovery, the endogenous driving force of China's economy is still not strong.

In particular, the report mentions that China's economy is resilient, potential and dynamic, and its long-term good fundamentals remain unchanged. Adhering to a high level of opening up and accelerating the construction of a new development pattern with domestic circulation as the main body and domestic and international dual circulation promoting each other will strengthen the driving force for the international development of RMB. The steady opening up of the financial market, the continuous improvement of the acceptance of RMB by domestic and foreign market players, and the increasingly perfect financial infrastructure for cross-border RMB receipt and payment will all help the internationalization of RMB to a higher level. (End)