Central Bank Official: Appropriately Integrate Investment Channels to Attract More Overseas Institutions to Make Orderly Investments in the Domestic Market

    The head of the Macroprudential Supervision Bureau at the People's Bank of China stated that efforts will be made to further advance high-level two-way opening of financial markets. This includes enhancing transparency, rule-based operations, and predictability; improving trading efficiency and liquidity in financial markets; appropriately integrating investment channels; and attracting more overseas institutions to invest in domestic markets in an orderly manner. Support will be provided for Shanghai's development as an international financial center, aiming to establish it as a hub for renminbi financial asset allocation and risk management.

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Financial Reform and Opening-Up Deepen Continuously; Renminbi's International Status Steadily Enhances—Financial Times Interviews Head of the Macroprudential Supervision Bureau of the People's Bank of China

    During the 14th Five-Year Plan period, the People's Bank of China further deepened financial reforms and high-level opening-up, steadily and prudently advancing the internationalization of the renminbi. This enhanced the quality and level of renminbi internationalization, promoted broader use of the renminbi in cross-border transactions, and further elevated its international status and global influence. Recently, a Financial Times reporter conducted an exclusive interview with the head of the Macroprudential Supervision Bureau of the People's Bank of China, engaging in an in-depth exchange on the solid work and rich achievements of the People's Bank of China in advancing RMB internationalization during the 14th Five-Year Plan period.

    Financial Times reporter: Could you please introduce the work achievements of the People's Bank of China in promoting the cross-border and international use of the RMB during the 14th Five-Year Plan period?

    Head of the Macroprudential Supervision Bureau of the People's Bank of China: The 14th Five-Year Plan calls for “steadily advancing the internationalization of the renminbi, adhering to market-driven principles and enterprise autonomy, and fostering new mutually beneficial cooperative relationships based on the free use of the renminbi.” In accordance with the directives of the CPC Central Committee and the State Council, the People's Bank of China has followed market-driven and mutually beneficial principles, guided by serving the real economy and facilitating trade and investment. We have provided business entities with more currency options for cross-border transactions. At the State Council Information Office's press conference on “High-Quality Implementation of the 14th Five-Year Plan” held on September 22, Governor Pan Gongsheng noted: “Viewed over a longer timeframe, the steady rise of the renminbi's international status has been a significant feature of the international monetary system's transformation over the past two decades.” Currently, the renminbi has become China's primary settlement currency for external payments and receipts, the world's second-largest trade financing currency, and the third-largest payment currency. It holds the third-largest weight in the International Monetary Fund's Special Drawing Rights (SDR) currency basket. Specifically, the following achievements stand out:

    First, cross-border RMB trade and investment financing have surged significantly, markedly enhancing the currency's effectiveness in serving the real economy. Through continuous refinement of the policy framework and deepening high-level trade and investment facilitation pilot programs, the network effects of RMB's international usage have gradually materialized. In the first half of 2025, the total value of cross-border RMB receipts and payments reached 35 trillion yuan, a year-on-year increase of 14%. Among these, cross-border RMB receipts and payments for goods trade totaled 6.4 trillion yuan, accounting for 28% of the total cross-border receipts and payments in both domestic and foreign currencies during the same period. Both the transaction volume and share reached their highest levels on record. Against the backdrop of increased exchange rate flexibility, more enterprises are willing to use RMB for cross-border settlements to hedge against exchange rate risks and reduce financial costs.

    Second, China's financial markets have steadily opened up, with the offshore RMB market developing healthily and the global appeal of RMB assets significantly increasing. Currently, overseas entities hold over 10 trillion yuan in onshore RMB financial assets. Central banks or monetary authorities in more than 80 countries and regions have included the RMB in their foreign exchange reserves, while RMB bonds and stocks have been incorporated into major global asset trading indices. Financial market connectivity between the mainland and Hong Kong has deepened, with Hong Kong emerging as the core hub for offshore RMB business. London, Singapore, Dubai, and other locations have developed distinctive offshore RMB markets. RMB deposits in major offshore markets reached 1.6 trillion yuan. The outstanding volume of offshore RMB bonds and panda bonds issued by overseas institutions totaled approximately 2 trillion yuan.

    Third, the global RMB payment and clearing network has gradually matured, making the RMB increasingly “user-friendly.” After years of development, the People's Bank of China has essentially established a multi-channel, wide-coverage cross-border RMB payment and clearing network. This includes the Cross-border Interbank Payment System (CIPS), commercial banks' internal cross-border systems, and cross-border retail payment networks built by commercial institutions such as China UnionPay, Tenpay, and Alipay. Among these, CIPS has connected 1,729 participants, covering over 5,000 legal entity banks across 189 countries and regions on six continents. Cross-border digital RMB transactions, along with domestic and international rapid payment systems and QR code interoperability, are advancing steadily, continuously improving cross-border payment efficiency. The RMB clearing network is also accelerating its expansion, with authorized clearing banks established in 33 countries (regions), covering major international financial centers.

    Fourth, international monetary and financial cooperation has been comprehensively deepened, with the renminbi playing a significant role in the global financial stability system. At the global level, the renminbi has been included in the Special Drawing Rights (SDR) currency basket, holding a weight of 12.28%, ranking behind the US dollar and the euro. At the regional level, under the multilateralized Chiang Mai Initiative Mechanism, new arrangements for rapid financing tools funded by freely usable currencies such as the renminbi have been established, further strengthening the regional financial safety net. At the bilateral level, the People's Bank of China has signed bilateral currency swap agreements with central banks or monetary authorities in 32 countries and regions, playing a vital role in maintaining global financial stability and promoting the cross-border use of the renminbi.

    Financial Times reporter: In recent years, the People's Bank of China has expanded both the scale and scope of its currency swap agreements with other central banks. What role have these swaps played?

    Head of the Macroprudential Supervision Bureau, People's Bank of China: Inter-central bank currency swaps represent a primary form of international central bank cooperation. Based on mutual trust and specific conditions, two central banks can exchange their respective currencies for each other's, with the original currencies reverted upon maturity. Essentially, this constitutes a collateralized financing arrangement. Currently, the People's Bank of China has signed 32 effective swap agreements with the European Central Bank and central banks or monetary authorities of countries and regions including New Zealand, South Korea, Indonesia, Brazil, and Saudi Arabia. These agreements cover major economies across key regions on six continents, with a total value of approximately RMB 4.5 trillion.

    From both global and Chinese perspectives, currency swaps primarily serve three functions. First, they can be used to provide liquidity to financial markets and maintain financial stability. Following the outbreak of the 2008 international financial crisis, when liquidity tightened across major global currencies, central banks or monetary authorities from multiple countries and regions proactively proposed establishing currency swap mechanisms with China to obtain liquidity support. Such arrangements, wherein central banks commit to providing mutual liquidity support, play a crucial role in safeguarding global financial stability. Currently, the currency swap network established by the People's Bank of China has become an integral part of the global financial safety net. Second, currency swaps can also support the real economy. A central bank can channel swap funds through commercial banks to enterprises for bilateral trade and investment, thereby facilitating trade and investment between the two countries. Furthermore, currency swaps form an important part of financial cooperation between nations. They can incentivize financial institutions from both sides to provide bilateral local currency settlement services, promote local currency settlements, and help enterprises reduce foreign exchange costs and hedge exchange rate risks in their economic and trade activities.

    Moving forward, the People's Bank of China will systematically expand the coverage of currency swap cooperation, prioritizing deeper collaboration with countries and regions that have close economic and trade ties with China. This will involve the effective utilization of swap funds to increase liquidity supply and promote trade and investment facilitation.

    Financial Times reporter: How will the People's Bank of China promote broader use of the renminbi in international trade, investment, and financing in the next phase?

    Head of the Macroprudential Supervision Bureau, People's Bank of China: The cross-border use of the renminbi is a natural progression. With the accelerating diversification of the international monetary system and growing endogenous demand for renminbi usage among economic entities, the People's Bank of China will continue to create a more favorable environment for domestic and foreign entities to hold and use the renminbi, in accordance with the arrangements of the Party Central Committee and the State Council. Key tasks include:

    First, better serve the real economy and promote trade and investment facilitation. We will enhance high-quality policy supply, comprehensively review, optimize, and integrate policies related to RMB settlement for cross-border trade and investment, further refine policies on overseas listing fund management for enterprises, and optimize policies concerning multinational corporate group cash pools. We will guide commercial banks to enhance their cross-border financial service capabilities, include more qualified enterprises in the list of high-quality enterprises, streamline business processing procedures, and improve the efficiency of RMB fund receipts and payments.

    Second, deepen the financing function of the RMB. Continue to refine RMB financing support policies and tools, better leverage the role of central bank currency swap arrangements in supporting cross-border RMB usage, improve management of cross-border interbank RMB financing, and encourage and support more qualified overseas institutions to issue Panda bonds domestically.

    Third, further advance high-level two-way opening of financial markets. Enhance transparency, rule-based operations, and predictability to improve market trading efficiency and liquidity. Appropriately integrate investment channels to attract more overseas institutions to invest in domestic markets in an orderly manner. Support the development of Shanghai as an international financial center, building it into a hub for RMB financial asset allocation and risk management.

    Fourth, support the development of offshore RMB markets. Improve arrangements for cross-border RMB liquidity supply, optimize the layout of clearing banks, and continue to strengthen policy support for clearing banks, including liquidity provision. Support domestic and foreign institutions in issuing and trading RMB assets overseas, normalize the issuance of central bank bills, and enrich liquidity management and risk management tools. Consolidate and enhance Hong Kong's status as an international financial center and offshore RMB business hub.