BEIJING (Realist English). China’s overseas lending in renminbi (RMB) has surged sharply in recent years, underscoring Beijing’s strategic push to elevate the yuan’s global role and lessen its exposure to the U.S. dollar.
External loans, deposits, and bond investments in renminbi by Chinese banks have quadrupled to more than Rmb3.4 trillion ($480 billion) over the past five years, according to official data. The move reflects a coordinated effort to build a more multipolar global financial system and insulate China from Western sanctions that rely on dollar dominance.
At the same time, Beijing has been widening access for foreign investors to buy yuan-denominated bonds while prioritizing the currency’s use in trade settlements. “From China’s perspective, [renminbi settlement] shows that no matter what happens geopolitically, it can still trade,” said Adam Wolfe, emerging markets economist at Absolute Strategy Research in London.
Data from the State Administration of Foreign Exchange show that Chinese banks’ overseas fixed-income assets have more than doubled in a decade to over $1.5 trillion, with the RMB share jumping to nearly $484 billion by June. This includes about Rmb360 billion in loans and deposits, up from Rmb110 billion in 2020.
The Bank for International Settlements (BIS) reported that yuan lending to developing countries rose by $373 billion between 2019 and 2023, marking a “turning point away from dollar- and euro-denominated credit.” Nations such as Kenya, Angola, and Ethiopia have converted parts of their dollar debts into yuan, while Indonesia, Slovenia, and Kazakhstan have issued or announced plans to issue yuan bonds.
A large share of the growth has come from trade finance. The yuan’s share of global trade financing has quadrupled in three years to 7.6% as of September, according to SWIFT, making it the second-most-used trade currency after the dollar.
Beijing has also expanded the use of the renminbi through a network of offshore clearing banks and currency swap lines with trading partners. Transactions via China’s Cross-Border Interbank Payment System (CIPS) now exceed Rmb40 trillion per quarter, even as the yuan’s share of global payments on SWIFT has fallen — suggesting a gradual shift toward China’s own financial infrastructure.
“Chinese officials see a dollar-based global system as inherently unstable,” said Bert Hoffman, a professor at the National University of Singapore. “A multicurrency framework gives China greater security and flexibility.”
Customs data show that around 30% of China’s total trade — and over half of its cross-border transactions — are now settled in renminbi, up from a fraction a decade ago.
Still, capital controls remain a barrier to full internationalization. The IMF estimates that the renminbi accounted for just 2.1% of global foreign exchange reserves at the start of 2025, far behind the dollar and euro.
To address this, Beijing and Hong Kong authorities are working to deepen liquidity and attract investors. New measures include opening the onshore repo market to foreign institutions — allowing them to use renminbi-denominated assets as collateral — and launching a “road map” to boost issuance and trading activity in Hong Kong.
“It’s as significant as the stock connect programmes that linked Hong Kong to mainland exchanges,” said Paul Smith, head of markets for Japan, North Asia and Australia at Citi. “Ultimately, it will accelerate the renminbi as a funding currency.”
Analysts say China is not seeking to replace the dollar but to build a credible alternative. “The policy is moving gradually,” said Hoffman. “But all the elements for a faster internationalisation of the renminbi are now falling into place.”
