Breakingviews - China's Trade Power Could Accelerate the Yuan's Ascendancy

Written by Emily J. Thompson, Senior Investment Analyst

Source: Reuters

Updated: Nov 17 2025

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Source: Reuters

Policy Shift in Currency Internationalization: China's recent economic blueprint for 2026-2030 omits the word "prudently" regarding yuan internationalization, indicating a more aggressive approach, although capital flow controls will still limit progress.
Current Status of the Yuan: Despite being the second-largest economy, China's yuan ranks fifth in global trading, making up 8.5% of currency transactions, an increase from 7% in 2022, aided by currency swap agreements.
Focus on Trade Settlement: China is likely to prioritize trade settlement in yuan, as evidenced by its steel industry's demand for yuan-denominated transactions with BHP and Nexperia's insistence on settling all transactions in yuan.
Impact on Global Trade Dynamics: The shift towards yuan transactions could significantly increase local currency trade, appealing to countries like Brazil and Russia that seek to reduce dependence on the U.S. dollar, although China does not aim to completely replace the dollar.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.