Yuan Internationalization Reaches New Milestone
The share of China's cross-border trade settled in renminbi reached a record 52.9 percent in the first half of 2026, according to data from the China Foreign Exchange Trade System (CFETS) and the People's Bank of China. This represents a significant acceleration in yuan internationalization, with the currency increasingly displacing the US dollar in bilateral trade settlements involving China.
Trade Settlement Volume and Composition
Cumulative cross-border RMB settlement in trade and other current account items reached 122.61 trillion yuan by end-Q1 2026 — an all-time high — up from 118.09 trillion yuan at end-2025. Quarterly cross-border RMB settlement for trade stood at approximately 28.2 trillion yuan in Q1 2026, with monthly data for April showing service trade settlement at 90 billion yuan and foreign direct investment settlement at 410 billion yuan.
The composition of RMB cross-border settlement has also become more diversified:
- Trade settlement: the dominant component, accounting for the majority of total volume
- Service trade and other current accounts: growing rapidly as China's services sector globalizes
- Foreign direct investment (FDI): RMB-denominated FDI inflows increasingly common in strategic sectors
- Outward direct investment (ODI): Chinese firms settling overseas acquisitions in RMB at record pace
Structural Drivers of RMB Internationalization
Several structural factors underpin the RMB's rising global profile. China's large and growing trade surplus provides a natural supply of RMB for settlement. The PBOC has signed bilateral currency swap agreements with over 40 central banks, creating liquidity infrastructure for RMB-denominated transactions. Additionally, the inclusion of Chinese bonds in major global bond indices has increased foreign institutional demand for RMB assets, which in turn supports broader use of the currency in financial transactions.
Implications for Global Finance
The 52.9 percent settlement share marks a new threshold in the gradual de-dollarization of China's external trade. While the US dollar remains dominant in global trade finance, China's position as the world's largest trading nation gives the RMB substantial room to expand its international footprint in the years ahead.
Source: PBOC, CFETS, CEIC data; H1 2026 reports