CONTENTS
1
CONTENTS
PART ONE
Executive Summary
3
PART TWO
International Use of the RMB in 2020
5
I. Cross-border Use of the RMB
5
II. Use of the RMB in Current Account Transactions
9
III. Use of the RMB in Capital Account Transactions
12
IV. RMB-denominated Commodity Trading and Transactions
17
V. Use of the RMB in Foreign Exchange Market
17
VI. RMB as an International Reserve Currency
19
VII. Cross-border Circulation of RMB Banknotes
19
VIII. Cross-border Interbank Payment System
19
IX. Central Bank Cooperations
21
X. Interest Rates and Exchange Rates
23
PART THREE
Policies and Relevant Reforms
26
I. New Policies on the Cross-border RMB Settlements
26
II. Further Opening-up of the Capital Market
27
III. Exchange Rate Formation Regime
29
PART FOUR
Offshore RMB Market
30
I. Interest Rate and Exchange Rate
30
II. Offshore RMB Deposits
32
III. Offshore RMB-denominated Financing
34
IV. Issuance of RMB-Denominated Central-Bank Bills
34
V. The RMB in Global FX Market
35
VI. Offshore RMB Clearing
36
PART FIVE
Prospect
37
I. The cross-border Use of the RMB in Current Account Transactions
Will Be Further Expanded
37
2
2021 RMB INTERNATIONALIZATION REPORT
II. The Channels of the RMB Cross-border Investment and
Financing Will Be Further Facilitated
38
III. The Bilateral Monetary Cooperation Will Proceed Steadily
38
IV. The RMB Internationalization Infrastructure Will Be
Further Improved
38
PART SIX
Highlights of RMB Internationalization
41
Afterword
76
Boxs
Box 1
Use of the RMB in ASEAN Countries
8
Box 2
Trade in Goods Settled in RMB (2012-2020)
11
Box 3
Foreign Demand for RMB-denominated Financial Assets
16
Box 4
Use of the RMB in the Commodities Sector Grows Steadily
17
Box 5
Cross-border Interbank Payment System (CIPS) Participants
and RMB Clearing Services
20
Box 6
Overseas RMB Clearing Banks
22
Box 7
New Cross-border RMB Settlement Policies to Preserve
Foreign Trade and Investment
26
Box 8
The Launch of the Cross-Boundary Wealth Management
Connect Pilot Scheme in the Guangdong-Hong Kong-Macao
Greater Bay Area
28
Box 9
Market Survey on the International Use of the RMB
39
Figures
Figure 2-1
Monthly Cross-border RMB Settlement during 2019-2020
5
Figure 2
-
2
Yearly Cross-border RMB Settlement during 2010-2020
6
Figure 2
-
3
Geographical Distribution of the Cross-border RMB
Settlement in 2020
7
CONTENTS
3
Figure 2-4
Monthly RMB Settlement under the Current Account
9
Figure 2-5
Share of RMB Settlement under the Current Account
10
Figure 2
-
6
Monthly RMB Settlement under the Capital Account
13
Figure 2-7
Direct Investment Settled in RMB
13
Figure 2-8
Cross-border Cash Pooling Business Settled in RMB
14
Figure 2-9
The Issuance of Panda Bonds
15
Figure 2-10
Average Daily Cross-border RMB Clearing Statistics
20
Figure 2-11
Shanghai Interbank Offered Rate (1)
23
Figure 2-12
Shanghai Interbank Offered Rate (2)
24
Figure 2-13
Movements in Exchange Rate of CNY/USD
25
Figure 4-1
Movements in HK Offshore RMB Lending Rate
in 2020 (1)
31
Figure 4-2
Movements in HK Offshore RMB Lending Rate
in 2020(2)
31
Figure 4-3
Movements in Exchange Rate of CNH/USD
32
Figure 4-4
RMB-denominated Deposits and Loans in HK
33
Figure 4-5
Offshore RMB-denominated Deposits
33
Figure 5-1
Share of Respondents Considering Increasing
Use of the RMB
39
Figure 5-2
Share of Respondents Using RMB-denomination
during FX Fluctuation
40
Figure 5
-
3
Share of Respondents Considering RMB-denominated
Financing
40
Tables
Table 2-1 Cross-border RMB Settlement by Province in 2020
6
Table 2-2 Domestic RMB Financial Assets Held by Non-residents
16
Table 2-3 Trading Volume of the RMB against Foreign Currencies
in Interbank Foreign Exchange Spot Market in 2020
18
KEY ABBREVIATIONS
1
KEY ABBREVIATIONS
B&R The Belt and Road
BBGA Bloomberg Barclays Global Aggregate Index
BIS Bank for International Settlements
BMI Broad Market Index
CDs Certificates of Deposits
CFETS China Foreign Exchange Trade System
CIBM China
’
s Interbank Bond Market
CIPS Cross-border Interbank Payment System
CMU Central Moneymarkets Unit
COFER Currency Composition of Official Foreign Exchange Reserves
ETF Exchange Trade Fund
FAB First Abu Dhabi Bank
FTSE Financial Times Stock Exchange Group
FX Foreign Exchange
HIBOR Hong Kong Interbank Offered Rate
HKEX Hong Kong Exchange and Clearing
HKMA Hong Kong Monetary Authority
IMF International Monetary Fund
MOU Memorandum of Understanding
MSCI Morgan Stanley Capital International
NDFs Non-Deliverable Forwards
NEER Nominal Effective Exchange Rate
ODI Outward Direct Investment
OTC Over-the-Counter
PBC People
’
s Bank of China
PTA Pure Terephthalic Acid
QFII Qualified Foreign Institutional Investors
REER Real Effective Exchange Rate
2021 RMB INTERNATIONALIZATION REPORT
2
REITs Real Estate Investment Trusts
RMB Renminbi
RQDII Renminbi Qualified Domestic Institutional Investors
RQFII Renminbi Qualified Foreign Institutional Investors
RTGS Real Time Gross Settlement
SAFE State Administration of Foreign Exchange
SAR Special Administrative Region
SDR Special Drawing Right
SGX Singapore Exchange
SHIBOR Shanghai Interbank Offered Rate
SWIFT Society for Worldwide Interbank Financial Telecommunication
TSR Technically Specified Rubber
UAE United Arab Emirates
PART ONE
Executive Summary
3
PART ONE
Executive Summary
I
n the face of a complicated and grim economic environment at home and abroad
in 2020, especially the serious impact of COVID-19 pandemic, the People’s Bank
of China (the PBC) adhered to the guidance of Xi Jinping Thought on Socialism with
Chinese Characteristics for a New Era, and resolutely implemented the decisions
and arrangements of the CPC Central Committee and the State Council. The PBC
responded proactively to ensure stability on six fronts and maintain security in six
areas, thereby contributing to the establishment of a new development paradigm
with domestic circulation as the mainstay and domestic and international circulations
reinforcing each other. The PBC steadily and prudently promoted the international
use of the RMB, with the aim to advance the facilitation of cross-border trade and
investment and serve the real economy with adequate cross-border settlement policies
and infrastructure. The RMB has been well used in cross-border trade and investment
transactions. More foreign central banks held RMB-denominated assets as reserves,
and the RMB as an invoicing currency witnessed new progress.
In 2020, there was a relatively rapid growth in the cross-border use of the RMB. The
total amount of cross-border payments and receipts settled in RMB was RMB 28.39
trillion yuan, with a year-on-year (yoy) increase of 44.3% and a net outflow of RMB
185.79 billion yuan, reaching a record high in terms of volume. In the first half of
2021, the amount of cross-border payments and receipts settled in RMB totaled RMB
17.57 trillion yuan, with a yoy increase of 38.7%. The statistics from SWIFT (Society
for Worldwide Interbank Financial Telecomm) showed that RMB ranked 5th among
the main international payment currencies with a share of 2.5% in June 2021, 0.7
percentage point higher than that in June 2020. By the end of the first quarter of 2021,
the share of the RMB in globally disclosed holdings of foreign exchange reserves
remained a slightly upward trend, ranking 5th with a share of 2.5%, 1.4 percentage
points higher than that of 2016 when the RMB was officially included in the Special
Drawing Right (SDR) currency basket.
2021 RMB INTERNATIONALIZATION REPORT
4
The growth in the cross-border use of the RMB was partly due to the facilitation
of cross-border RMB settlement under the current account and direct investment,
and progress was made in such real economy sectors as commodities trade and
surrounding areas such as ASEAN. The RMB exchange rate moved in both directions
with enhanced flexibility based on market supply and demand and remained basically
stable at an adaptive and equilibrium level. More market entities chose to use RMB
in cross-border trade and investment with respect to avoid exchange rate risk. The
streamlined policies for cross-border RMB settlement was also a major concern for
businesses regarding international trade and direct investment.
Another important factor promoting the international use of the RMB upward was the
increasing foreign demand for RMB-denominated assets. The rapid growth of cross-
border RMB use in portfolio investment suggested that foreign investors actively
allocated RMB assets. With its economy recovering steadily, China was the only major
economy to register positive growth in 2020 and one of the few major economies
staying on a normal path. Considering the interest rate spread between the RMB
and the major convertible currencies, the attraction of the RMB financial assets for
global investors has been expected to persist. By the end of June 2021, the amount of
RMB-denominated financial assets such as stocks, bonds, loans, and deposits held by
overseas entities totaled RMB 10.26 trillion yuan, with a yoy increase of 42.8%.
In the next stage, the PBC will continue to follow the guidance of Xi Jinping Thought
on Socialism with Chinese Characteristics for a New Era, and firmly implement the
decisions and arrangements of the CPC Central Committee and the State Council.
Adhering to the general principle of pursuing progress while ensuring stability,
the PBC will conform to market-driven principles and respect the choices of market
entities while further improving the policies and infrastructure for the cross-border
use of the RMB, namely, promoting the two-way opening-up of financial markets,
supporting the offshore RMB market development, thereby contributing to a
conducive environment for more convenient use of the RMB and managing to strike a
balance between development and security. Meanwhile, the PBC will further improve
the macro-prudential management framework for the cross-border capital flows, and
firmly safeguard the bottom line that no systemic risk should occur.
PART TWO
International Use of the RMB in 2020
5
PART TWO
International Use of the RMB in 2020
I
n 2020, the cross-border use of the RMB increased steadily with its share in the
total cross-border settlement reaching a record high. The cross-border receipts and
payments were generally balanced with a small net outflow.
I. Cross-border Use of the RMB
In 2020, cross-border RMB settlement totaled RMB 28.39 trillion yuan, increasing by 44.3%
on a yearly basis. The total receipt reached RMB 14.10 trillion yuan, with an increase of
40.8% yoy while the total payment was RMB 14.29 trillion yuan, increasing by 48.0% on a
yearly basis. With a receipt to payment ratio of 1
∶
1.01, the cross-border RMB settlement
demonstrated a net outflow of RMB 185.79 billion yuan compared with a net inflow of
RMB 360.53 billion yuan in 2019. In 2020, the cross-border RMB settlement accounted
for 46.2% of the total cross-border settlement, reaching a record high in history, which
was 8 percentage points higher than that of 2019. In the first half of 2021, the cross-border
RMB settlement was 17.57 trillion yuan, accounting for 48.2% of the total cross-border
settlement in the same period, which was 2.4 percentage points higher yoy.
Figure 2-1
Monthly Cross-border RMB Settlement during 2019-2020
Source: The People’s Bank of China (PBC).
2021 RMB INTERNATIONALIZATION REPORT
6
Figure 2
-
2
Yearly Cross-border RMB Settlement during 2010-2020
Source: PBC.
In 2020, Shanghai, Beijing and Shenzhen continued to rank the top 3 in terms of the
provincial or regional cross-border RMB settlement volume, with a share of 51.5%,
18.2% and 8.7% respectively of the total cross-border RMB settlement. Nation-widely,
9 provinces (autonomous regions and municipalities directly under the central
government) enjoyed a cross-border RMB settlement volume over RMB 200 billion
yuan. Meanwhile, the 8 border provinces (autonomous regions included) reached an
aggregate amount of RMB 552.56 billion yuan, up 14.3% yoy.
Table 2-1
Cross-border RMB Settlement by Province in 2020
Unit: billion yuan, %
Ranking Region Current Account Capital Account Total Share
1 Shanghai 1,542.79 13,087.99 14,630.77 51.5
2 Beijing 837.72 4,339.70 5,177.41 18.2
3 Shenzhen 1,062.59 1,398.47 2,461.06 8.7
4 Guangdong (excluding Shenzhen) 915.80 739.10 1,654.89 5.8
5 Jiangsu 581.58 364.08 945.66 3.3
6 Zhejiang 431.41 357.32 788.73 2.8
7 Shandong 152.64 154.58 307.22 1.1
8 Fujian 65.87 227.37 293.24 1.0
9 Tianjin 129.56 85.30 214.86 0.8
Others 1,047.44 866.12 1,913.59 6.8
Total 6,767.4 21,620.03 28,387.43 100.0
Source: PBC.
PART TWO
International Use of the RMB in 2020
7
In 2020, the amount of cross-border RMB settlement between Chinese Mainland and
Hong Kong accounted for 46.0% of the total cross-border RMB settlement, which was
the highest. Singapore (12.9%), United Kingdom (5.4%) and Macao (3.7%) ranked
2nd, 3rd and 4th respectively. The shares of Hong Kong SAR of China, Singapore, the
United Kingdom, Macao SAR of China, Taiwan province of China all witnessed an
increase compared with 2019.
Figure 2
-
3
Geographical Distribution of the Cross-border RMB Settlement in 2020
Source: PBC.
In 2020, the amount of cross-border RMB settlement between mainland China and
countries along the Belt and Road (B&R) exceeded RMB 4.53 trillion yuan, a yoy
increase of 65.9%, accounting for 16.0% of the total cross-border RMB settlement
during the same period. Among them, the settlement in goods trade was RMB 870.10
billion yuan, a yoy increase of 18.8%, and the settlement in direct investment was
RMB 434.12 billion yuan, a yoy increase of 72.0%. By the end of 2020, the PBC has
signed has signed bilateral local currency swap agreements with 22 central banks or
monetary authorities along the B&R, and established the RMB clearing arrangements
in 8 countries along the B&R.
2021 RMB INTERNATIONALIZATION REPORT
8
Box 1
Use of the RMB in ASEAN Countries
In recent years, the economic and trade cooperation between China and ASEAN has been
continuously deepening and their bond have been increasingly strong. For most ASEAN
countries, China is the largest trading partner and the important source of investment
fund. In 2020, China’s total imports and exports with ASEAN countries increased by 7%
yoy. ASEAN has become China’s first largest trading partner.
China’s monetary and financial cooperation with ASEAN has been deepening
incessantly. In recent years, China and ASEAN have initially established a multi-
level monetary and financial cooperation framework in a broad range of areas, thereby
contributing to multiple occasions for the cross-border use of RMB. The PBC signed
bilateral local currency swap agreements with the central banks of Indonesia, Malaysia,
Thailand, Singapore and Laos, and signed a local currency cooperation agreement
with Bank of the Lao P.D.R.. The PBC and Bank Indonesia signed the Memorandum
of Understanding on the Framework for Cooperation to Promote the Settlement of
Current Account Transactions and Direct Investment in Local currencies, so as to
meet the market and economic development need and advance bilateral cooperation
under the Local Currency Settlement Framework (LCS), and promote convenience
for the use of local currency with respect to the settlement of bilateral trade and direct
investment. RMB clearing arrangements have been established in Malaysia, Thailand,
Singapore and the Philippines, and Cross-border Interbank Payment System (CIPS)
as well as Chinese banks have been operating in all the 10 ASEAN countries. Direct
trading between RMB against Singapore dollar, Thai baht, Malaysian ringgit and
Cambodian riel has been realized. The Bank of the Lao P.D.R launched RMB/Kip direct
trading in Laos.
Driven by the above favorable factors, use of the RMB in ASEAN has gained positive
progress in 2020, the total amount of RMB cross-border settlement between China and
ASEAN was RMB 4.15 trillion yuan, with a yoy increase of 72.2%, which accounted
for 14.6% of the total amount of cross-border RMB settlement, 2.4 percentage points
higher than that of 2019. Between China and ASEAN, the cross-border RMB settlement
of goods trade totaled RMB 745.90 billion yuan, a yoy increase of 20.2%, and direct
investment was RMB 425.10 billion yuan, a yoy increase of 70.8%.
PART TWO
International Use of the RMB in 2020
9
II. Use of the RMB in Current Account Transactions
In 2020, the total amount of the cross-border RMB settlement under the current
account was RMB 6.77 trillion yuan with a yoy increase of 12.1%, among which the
receipts amounted to RMB 2.91 trillion yuan, increasing by 9.8% yoy, the payments
amounted to RMB 3.86 trillion yuan, increasing by 14.2% yoy, and the net payments
amounted to 0.95 trillion yuan, increasing by 31.5% yoy. The total amount of the cross-
border RMB settlement under the current account accounted for 17.8% of the total
cross-border settlement, 1.7 percentage points higher compared with 2019.
Figure 2-4
Monthly RMB Settlement under the Current Account
Source: PBC.
2021 RMB INTERNATIONALIZATION REPORT
10
Figure 2-5
Share of RMB Settlement under the Current Account
Source: PBC.
1. Trade in Goods
In 2020, the total amount of the cross-border RMB settlement of trade in goods
reached RMB 4.78 trillion yuan, increasing by 12.7% yoy with a share of 14.8% of the
total cross-border settlement in goods trade, 1.4 percentage points higher than that in
2019. Among them, the cross-border RMB settlement under the general trade totaled
RMB 3.02 trillion yuan, increasing by 13.5% yoy, and that of the imported materials
processing trade totaled RMB 762.54 billion yuan, increasing by 2.1% yoy.
2. Trade in Services
In 2020, the cross-border RMB settlement of trade in services summed up to RMB
923.86 billion yuan, decreasing by 2.9% yoy and accounting for 25.5% of total cross-
border settlement in service trade during the same period, 1.7 percentage points
higher compared with the last year.
3. Income and Current Transfers
In 2020, the income payments settled in RMB totaled RMB 1,004.57 billion yuan,
increasing by 24.8% yoy, while the current transfer settled in RMB aggregated RMB
53.99 billion yuan, increasing by 45.0% yoy. The share of the cross-border RMB
settlement accounted for 54.8% in the cross-border income and current transfers, 5
PART TWO
International Use of the RMB in 2020
11
percentage points higher compared with the last year.
Box 2
Trade in Goods Settled in RMB (2012
-
2020)
In 2009, starting from the perspective of serving the real economy, China launched
the cross-border RMB settlement of the trade in goods based on the economic ties
with neighboring countries and regions. In 2012, the access of the cross-border RMB
settlement of the trade in goods was extended to the whole nation. The total amount of
cross-border RMB settlement of trade in goods hit another RMB 4 trillion yuan in 2020,
second only to the early highs of 2014 and 2015.
Since 2012, the cross-border RMB settlement of the trade in goods has been characterized
by the following features: First, the general trade is the main stay, the imported materials
processing trade settled in RMB fluctuates a bit more, and the cross-border e-commerce
business settled in RMB sees a rapid growth. The RMB settlement volume in general
trade has grown steadily since 2012. It registered RMB 3.02 trillion yuan in 2020,
accounting for 63.2% of the RMB settlement of the trade in goods. From 2012 to 2020,
the ratio of receipts to payments in RMB settlement of imported materials processing
trade was 2.91
∶
1, and the net RMB cross-border settlement volume was significantly
correlated with the RMB exchange rate and relatively volatile. Among which, it
registered RMB 762.54 billion yuan in 2020. Meanwhile, the RMB settlement in cross-
border e-commerce amounted to RMB 258.41 billion yuan, increasing by 50.0% yoy.
Second, the cross-border RMB settlement of the trade in goods is highly concentrated
in the wholesale industry
a
and manufacture of computers, communication and other
electronic equipment. From 2012 to 2020,it involved a total of 96 industries with
wholesale industry and manufacture of computers, communication and other electronic
equipment consistently ranking the top two. In 2020, the cross-border RMB settlement
in the wholesale industry amounted to RMB 1,273.73 billion yuan with a yoy increase
of 11.6%; RMB settlement in the manufacture of computers, communication and other
electronic equipment amounted to RMB 997.27 billion yuan with a yoy increase of 8.4%.
a
Wholesale industry here refers to: (1) activities of selling household goods and production materials in
bulk to other wholesale or retail units (including self-employed individuals) and other enterprises, institutions
and organizations, etc; (2) activities of engaging in import and export trade, trade brokerage and agency; (3) wholesale
activities at fixed stalls in various wholesale markets, and acquisition activities for the purpose of sales.
2021 RMB INTERNATIONALIZATION REPORT
12
Third, the cross-border RMB settlement of the trade in goods in the eastern regions
accounts for 90%. From 2012 to 2020, it amounted to RMB 31.57 trillion yuan,
2.03 trillion yuan and 1.58 trillion yuan in the eastern, central and western regions
respectively, of which the eastern region accounted for a share of 89.7%. In 2020, its
proportion in the settlement both in domestic and foreign currencies reached 15.6%,
9.3% and 9.6% for the eastern, central and western regions respectively, 5.1, 2.7 and 0.8
percentage points higher compared with 2012.
Fourth, Hong Kong has always been the largest overseas counterparty of RMB settlement
of the trade in goods, While the use of the RMB in goods trade between China and
European Union (EU) as well as other places has increased significantly. The proportion
of RMB settlement with Hong Kong SAR of China in the total RMB settlement of goods
trade was 42.2% in 2020, and Hong Kong maintained the largest counterparty among
overseas regions. In 2020, the proportions of the goods trade settled in RMB with EU
and ASEAN were 18.1% and 15.3% respectively, which made them rank the 2nd and
3rd in terms of the cross-border RMB settlement of the trade in goods.
The cross-border RMB settlement of the trade in goods has increased substantially from
a low base. It has played a role in helping businesses avoid foreign exchange rate risks
and reduce financial costs. In recent years, business areas such as commodities and
cross-border e-commerce have become a new pillar of growth. In the future, the PBC will
adhere to the orientation of serving the real economy, further enhance the facilitation
of the cross-border RMB settlement of the trade in goods, and ensure a high-quality
development of international use of the RMB.
III. Use of the RMB in Capital Account Transactions
In 2020, the cross-border RMB settlement under the capital account totaled RMB
21.61 trillion yuan with a yoy increase of 58.7%, of which receipts and payments
stood at RMB 11.19 trillion yuan and RMB 10.42 trillion yuan respectively. The direct
investments, portfolio investments and cross-border financing accounted for 17.7%,
76.4% and 4.3% of the total settlement under the capital account respectively.
PART TWO
International Use of the RMB in 2020
13
Figure 2
-
6
Monthly RMB Settlement under the Capital Account
Source: PBC.
Figure 2-7
Direct Investment Settled in RMB
Source: PBC.
1. Direct Investment
In 2020, the amount of cross-border direct investment settled in RMB totaled RMB
3.81 trillion yuan, up 37.1% yoy. Among them, the amount of the Outward Direct
Investment (ODI) transactions settled in RMB stood at RMB 1.05 trillion yuan,
increasing by 39.1% yoy. In 2020, the amount of RMB settlement in the Foreign Direct
2021 RMB INTERNATIONALIZATION REPORT
14
Investment (FDI) transactions hit RMB 2.76 trillion yuan, increasing by 36.3% yoy.
2. The Cross-border RMB Cash Pooling Business
By the end of 2020, 2611 cross-border RMB cash pools had been established
nationwide. In 2020, cross-border RMB cash pools had outflows of RMB 1.30 trillion
yuan and inflows of RMB 1.24 trillion yuan, totaling RMB 2.54 trillion yuan, with an
increase of 39.6% yoy.
Figure 2-8
Cross-border Cash Pooling Business Settled in RMB
Source: PBC.
3. Panda Bonds
The issuers of the Panda Bonds comprise government institutions, international
development institutions, financial institutions and non-financial enterprises. By the
end of 2020, the cumulative registration or approval (filed) quota of the Panda Bonds
reached RMB 1 trillion yuan, with the issuance amount totaling RMB 433.72 billion
yuan. In 2020, there were a total of 42 Panda Bonds issued in both CIBM and security
exchange markets, reaching the amount of RMB 58.65 billion yuan.
PART TWO
International Use of the RMB in 2020
15
Figure 2-9
The Issuance of Panda Bonds
Source: PBC.
4. Portfolio Investment
In 2020, the cross-border portfolio investment settled in RMB totaled RMB 16.50
trillion yuan with a yoy increase of 73.6%, and the net inflow reached RMB 578.39
billion yuan.
Bond Investment. In 2020, 905 foreign institutions entered the interbank bond market,
468 of which entered directly, 625 accessed through the Bond Connect, and 188 used
both channels mentioned above. In 2020, the total amount of the inflow hit RMB 6.44
trillion yuan in contrast to the outflow of RMB 5.48 trillion yuan, making a net inflow of
RMB 963.02 billion yuan. The net inflow that directly entered the bond market hit RMB
472.37 billion yuan, while that via the Bond Connect stood at RMB 490.65 billion yuan.
Stock Investment. In 2020, the cross-border settlement via both of the Shanghai-Hong
Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect totaled RMB 1.70
trillion yuan with a yoy increase of 65.3%, making a net outflow of RMB 413.29 billion
yuan in contrast to the net inflow of RMB 122.17 billion yuan in 2019. The net inflow via
Shanghai Stock Connect and Shenzhen Stock Connect reached RMB 178.05 billion yuan,
while the net outflow via Hong Kong Stock Connect reached RMB 591.34 billion yuan.
RQFII. In 2020, the amount of receipts and payments via the RQFII reached RMB 1.29
trillion yuan and 1.24 trillion yuan respectively, with a net inflow of RMB 52.63 billion yuan.
2021 RMB INTERNATIONALIZATION REPORT
16
Box 3
Foreign Demand for RMB-denominated Financial Assets
By the end of 2020, the amount of the financial assets held by foreign entities such as
domestic RMB stocks, bonds, loans, and deposits reached RMB 8.98 trillion yuan,
increasing by 40.1% yoy. Among them, the financial market value of stocks was RMB
3.41 trillion yuan, the outstanding amount of bonds under custody, RMB-denominated
deposits and loans were RMB 3.33 trillion yuan, RMB 1.28 trillion yuan, and RMB 0.96
trillion yuan respectively.
Stocks and bonds traded in domestic financial market have become the prominent options
of RMB assets allocated by overseas investors. By the end of 2020, the outstanding
amount of domestically traded RMB stocks and bonds held by foreign investors has
increased significantly by 54.5% yoy, among which bonds under custody accounted for
2.8% of the total bond custody in the CIBM, increasing by 47.4% yoy, and the market
value of stocks accounted for 4.3% of the total market value of A-shares in circulation,
increasing by 62.1% yoy. In 2020, stocks accounted for 54.9% of the amount increment
of the domestic RMB assets held by foreign entities.
Table 2-2
Domestic RMB Financial Assets Held by Non-residents
Unit: billion yuan
Instruments Dec.2019 Mar.2020 Jun.2020 Sep.2020 Dec.2020
Stocks 2,101.88 1,887.38 2,456.76 2,750.91 3,406.56
Bonds 2,262.93 2,319.90 2,572.42 3,015.92 3,335.08
Loans 833.16 887.17 972.05 983.08 963.02
Deposits 1,214.87 1,285.05 1,182.45 1,193.43 1,280.33
Total 6,412.84 6,379.49 7,183.68 7,943.34 8,984.99
Source: PBC.
5. Other Investments
In 2020, the total cross-border settlement amount under other investments such as
the cross-border financing and RMB loans for overseas projects reached RMB 1.30
trillion yuan, which was basically the same as last year, with a net outflow of 86
million yuan.
PART TWO
International Use of the RMB in 2020
17
IV. RMB-denominated Commodity Trading and Transactions
On June 22, 2020, low-sulfur fuel oil futures were listed on the Shanghai Futures
Exchange International Energy Trading Center. On November 19, 2020, international
copper futures were listed on the Shanghai Futures Exchange International Energy
Trading Center. On December 22, 2020, palm oil futures were officially introduced to
overseas traders. So far, seven specific varieties of futures—crude oil, iron ore, purified
terephthalic acid (PTA), TSR20, low-sulfur fuel oil, international copper and palm
oil—have been listed in China. Oversea traders who could access specific varieties of
futures in China can use RMB or USD as margin. By the end of 2020, foreign traders
had totally remitted fund inward equivalent of RMB 71.14 billion yuan as margin
and outward equivalent of RMB 78.00 billion yuan, in which the RMB settlement
accounted for 73.3% and 84.3% respectively.
Box 4
Use of the RMB in the Commodities Sector Grows Steadily
In 2020, the RMB was used in cross-border commodities trade. The cross-border RMB
payments and receipts in crude oil, iron ore, copper, soybean and other commodities trade
during the whole year amounted to 252.57 billion yuan, up 16.4% yoy. In the iron ore
trade, China Baowu Steel Group Co., Ltd made the first cross-border RMB settlement
with the world’s top three iron ore supplier at the beginning of the year, amounting to
more than 500 million yuan in aggregate. In August 2020, An steel Group and Rio Tinto
Group of Australia, one of the three largest iron ore suppliers in the world, made RMB
settlement of imported iron ore with an amount of RMB 100 million yuan. It is a sign
showing that the RMB is gradually being accepted by commodity traders, although the
amount settled in RMB is still at a low base.
V. Use of the RMB in Foreign Exchange Market
More and more trading entities got access to China’s interbank foreign exchange
market, with a total of 735 RMB foreign exchange spot trading members, 266 forward
trading members, 259 foreign exchange swap trading members, 213 currency swap
trading members, 163 option trading member, 30 RMB foreign exchange spot market
makers, and 27 forward swap market makers.
2021 RMB INTERNATIONALIZATION REPORT
18
The domestic interbank foreign exchange market operated smoothly, and the product
structure was generally stable, with annual RMB foreign exchange transaction volume
equivalent of USD 25.40 trillion, up 1.6% yoy, and an average daily transaction
volume of USD 104.53 billion. Among them, the CNY spot transaction volume was
equivalent of USD 8.38 trillion, up 5.6% yoy,and the CNY swap transaction volume
was equivalent of USD 16.32 trillion, down 0.2% yoy, among which the overnight
dollar swap trading volume was equivalent of USD 9.45 trillion, accounting for 57.9%
of total swap turnover. The currency swap transaction volumeamounted to USD 20.20
billion, down 60.6% yoy; RMB forward transaction volume was equivalent of USD
104.36 billion, up 37.4% yoy. The CNY foreign exchange option transaction volume
amounted to USD 566.66 billion, down 2.5% yoy.
In 2020, FX transactions against non-USD foreign currencies fell slightly, and spot
transaction volume against non-USD foreign currencies amounted to RMB 2.18 trillion
yuan, accounting for 3.8% of spot trading in the interbank foreign exchange market,
down 0.4% compared with last year.
Table 2-3
Trading Volume of the RMB against Foreign Currencies in Interbank Foreign
Exchange Spot Market in 2020
Unit: billion yuan
Currency USD EUR JPY HKD GBP AUD NZD
Trading
Volume
55,320.522 1,419.495 273.376 145.662 58.677 58.875 21.439
Currency SGD CHF CAD MYR RUB ZAR KRW
Trading
Volume
84.000 13.480 33.700 0.504 14.369 0.175 6.152
Currency AED SAR HUF PLN DKK SEK NOK
Trading
Volume
0.892 2.168 1.583 1.597 5.466 2.811 1.125
Currency TRL MXN THB
KZT
(regional trade)
KHR
(regional trade)
MNT
(regional trade)
—
Trading
Volume
0.950 0.911 35.888 0.002 0.006 0 —
Source: China Foreign Exchange Trade System (CFETS).
PART TWO
International Use of the RMB in 2020
19
VI. RMB as an International Reserve Currency
According to the quarterly data on the Currency Composition of Official Foreign
Exchange Reserves (COFER) released by the International Monetary Fund (IMF),
RMB-denominated reserves held by reporting entities reached USD 287.46 billion,
accounting for 2.5% of the total amount of official foreign exchange reserves which
had indicated currency composition by the end of the first quarter of 2021 and ranked
5th, which is the highest level since the RMB-denominated reserve was listed by the
COFER survey in 2016. According to incomplete statistics, more than 70 central banks
or monetary authorities incorporated RMB-denominated assets into their foreign
exchange reserves.
VII. Cross-border Circulation of RMB Banknotes
In 2020, the cross-border circulation of RMB banknotes declined significantly due to
the impact of the Covid-19 pandemic as well as some other factors. The total volume
of cross-border RMB banknotes transported by banks was RMB 13.63 billion yuan,
down 87.0% yoy, of which outbound volume was RMB 2.32 billion yuan, and inbound
volume was RMB 11.31 billion yuan, resulting in a net inward volume of RMB 8.99
billion yuan.
VIII. Cross-border Interbank Payment System
In 2020, the Cross-border Interbank Payment System (CIPS) operated steadily,
handling a total of 2.21 million cross-border RMB transactions with an overall
volume of RMB 45.27 trillion yuan, up 17.0% and 33.4% respectively yoy, and an
average daily processing of 8,855 transactions and volume of RMB 181.82 billion
yuan. In 2020, there were 1.67 million customer remittances, with the amount of
RMB 7.81 trillion yuan; 451,900 financial institutions remittances, with the amount of
RMB 32.66 trillion yuan; 26,800 bulk customer remittances, with the amount of RMB
125 million yuan; 57,700 bilateral settlement transactions, with the amount of RMB
4.80 trillion yuan; 250 clearing agency lending transactions, with the amount of RMB
109 million yuan.
2021 RMB INTERNATIONALIZATION REPORT
20
Figure 2-10
Average Daily Cross-border RMB Clearing Statistics
Source: CIPS.
Box 5
Cross-border Interbank Payment System (CIPS) Participants and
RMB Clearing Services
Since its launch in 2015, the Cross-border Interbank Payment System (CIPS) has
maintained a safe and stable operation with an increasing number of domestic and
oversea participants of more diversifying types. The coverage of the CIPS’ network has
continued to expand and its business volume has increased gradually. It has provided
safe, convenient, efficient and low-cost services to participants in the field of cross-border
RMB payment, settlement and clearing.
In 2020, 9 new direct participants (4 of which were overseas RMB clearing banks) and
147 new indirect participants joined the CIPS. By the end of 2020, a total of 1,092
domestic and foreign institutions had linked to the CIPS through direct or indirect
means, including 42 direct participants 23 more compared to the number at the initial
launch in October 2015, and 1,050 indirect participants whose number increased by
about five times from the inital launch in 2015.
By the end of 2020, direct participants in the CIPS consisted of 37 domestic and
foreign banks (5 of which are overseas RMB clearing banks) and 5 financial market
infrastructures. Besides, there had been 1,050 indirect participants in CIPS covering
99 countries and regions worldwide, about half of which were foreign participants. By
PART TWO
International Use of the RMB in 2020
21
the end of 2020, the RMB clearing business of CIPS reached out to more than 3,300
corporate bodies of banks in 171 countries and regions around the world through direct
and indirect participation, with more than 1,000 institutions from countries along the
B
&
R (excluding Mainland China, Hong Kong SAR of China, Macao SAR of China and
Taiwan Region). From its launch to the end of 2020, the CIPS had processed a total of
7,513,500 transactions, amounting to RMB 125.04 trillion yuan.
IX. Central Bank Cooperations
1. Bilateral Local Currency Settlement
On January 6, 2020, the PBC signed the Bilateral Local Currency Cooperation
Agreement with the Bank of Lao P.D.R. On March 1, 2021, the PBC signed the Bilateral
Local Currency Cooperation Agreement with the National Bank of Cambodia. The
agreements expanded the covering business of local currency settlement to all current
and capital transactions that had been allowed by the two countries, which was
conducive to the fully application of bilateral local currencies and promoting trade
and investment facilitation.
On September 6, 2021, the PBC and Bank Indonesia formally launched cooperation
framework for Local Currency Settlement (LCS), so as to promote the facilitation of
local currencies used in settlement of bilateral trade and direct investment.
2. Bilateral Local Currency Swap
In 2020, the PBC signed a new bilateral currency swap agreement with the Bank of Lao
P.D.R, renewed the bilateral local currency swap agreements with the central banks or
monetary authorities in Egypt, Switzerland, Mongolia, Argentina, New Zealand, the
Republic of Korea, Iceland, Russia, Hong Kong SAR of China and other countries and
regions, and lifted the amount of bilateral local currency swap agreements with the
central banks of Pakistan, Chile, Hungary and other countries. By the end of 2020, the
PBC has signed bilateral currency swap agreements with the central banks or monetary
authorities of 40 countries and regions, totaling more than RMB 3.99 trillion yuan.
3. Overseas Clearing Arrangements of the RMB
By the end of 2020, the PBC has designated 27 overseas RMB clearing banks in 25
countries or regions.
2021 RMB INTERNATIONALIZATION REPORT
22
Box 6
Overseas RMB Clearing Banks
In recent years, the RMB clearing business of overseas clearing banks has steadily
increased, with an average RMB clearing amount of 344.76 trillion yuan and an average
annual growth rate of 8.2% in the past three years. By the end of December 2020,
altogether 907 participating banks and other institutions opened clearing accounts in
overseas RMB clearing banks. In 2020, the RMB clearing amount of overseas RMB
clearing banks totaled RMB 369.49 trillion yuan, increasing by 6.1% yoy.
The overseas RMB clearing banks are mainly concentrated in the Asia-Pacific region,
followed by Europe. At present, 13 of the total 27 RMB clearing banks are located in the
Asia-Pacific region, which have opened clearing accounts for a total of 612 participating
banks and other institutions, accounting for 67.5% of the total number of clearing
accounts at the clearing banks. In 2020, the RMB clearing amount of these 13 banks
totaled RMB 354.29 trillion yuan, accounting for 95.9% of the clearing amount of
all clearing banks. Among them, Hong Kong SAR of China and Singapore took the
dominant place, with a total RMB clearing amount of RMB 336.42 trillion yuan in
2020, accounting for 95.0% of the total RMB clearing amount of the clearing banks in
the Asia-Pacific region. The second was Europe, where currently 7 RMB clearing banks
were located and had opened clearing accounts for 225 participating banks and other
institutions, with a total RMB clearing amount of RMB 15.02 trillion yuan in 2020.
The RMB clearing banks have played an active role in the process of RMB
internationalization. The RMB clearing banks connect the onshore and offshore RMB
markets, and mostly took the initiative to provide RMB clearing services in international
market. In terms of RMB clearing, the RMB clearing banks have greatly improved the
efficiency of RMB clearing through continuing system construction. The RMB clearing
banks of Hong Kong SAR of China can provide 7×20.5 hours of RMB clearing services
for global customers. Besides, clearing banks have the responsibility to let more foreign
entities know the convenience of using the RMB when conduct business with Chinese
partners, such as Bolstering China-Japan Financial Cooperation Forum organized by the
RMB Clearing bank in Tokyo, RMB/RRW Drived Exchange Marbet Seminar organized
by the RMB clearing bank in Seoul. The cross-border RMB settlement volume between
the countries (regions) where overseas RMB clearing banks are located with mainland
PART TWO
International Use of the RMB in 2020
23
China accounted for 86.4% of the total in 2020. In terms of nurturing the offshore
market, the RMB clearing banks provide adequate RMB liquidity support for the offshore
market, relying on the policy advantages of obtaining RMB liquidity from China.
X. Interest Rates and Exchange Rates
1. Interest rates
In 2020, the overall RMB interest rate pivot in domestic money market depreciated
first and then appreciated, which reached a low point in May and then rebounded,
with a slight decline at the end of the year. By the end of 2020, the overnight, 7-day,
1-month, 3-month, 6-month and 1-year Shanghai Interbank Offered Rate (SHIBOR)
dropped by 35, 5, 20, 24, 18 and 9 basis points respectively from the beginning of the
year to close at 1.09%, 2.38%, 2.70%, 2.76%, 2.84% and 3.00%.
Figure 2-11
Shanghai Interbank Offered Rate (1)
Source: CFETS.
2021 RMB INTERNATIONALIZATION REPORT
24
Figure 2-12
Shanghai Interbank Offered Rate (2)
Source: CFETS.
2. Exchange rates
In 2020, RMB experienced both appreciation and depreciation based on market supply
and demand with enhanced resilience, and remained basically stable at a reasonable
level of equilibrium. At the end of the year, the China Foreign Exchange Trade System
(CFETS) RMB exchange rate index was 94.84, up 3.8% from the end of 2019.
In 2020, the domestic RMB exchange rates fluctuated in both directions with
significantly greater flexibility. The RMB had appreciated and depreciated against
the US dollar and other major global currencies, with the central parity rate of the
RMB appreciating 6.9%, 1.3% and 2.9% against the US dollar, the Japanese yen and
the British pound respectively, and depreciating 2.6% against EUR at the end of
2019.
In 2020, the central parity rate of the RMB/USD was as high as 6.52 and as low as
7.13, with a fluctuation range of 6,080 basis points and an annualized volatility of
4.5%. During 243 trading days, RMB appreciated on 140 days and depreciated on 103
days. The biggest intraday appreciation was 1.0% (670 bps) and the biggest intraday
depreciation was 0.8% (530 bps). At the end of the year, the central parity rate of the
RMB/USD exchange rate was 6.52, an appreciation of 6.9% compared with the end of
PART TWO
International Use of the RMB in 2020
25
the last year, and the closing rate against the USD stood at 6.54, an appreciation of 6.5%
compared with the previous year-end.
Figure 2-13
Movements in Exchange Rate of CNY/USD
Source: PBC, CFETS.
2021 RMB INTERNATIONALIZATION REPORT
26
PART THREE
Policies and Relevant Reforms
I
n 2020, new policies to enhance the facilitation of the cross-border RMB use were
lauched, and the opening-up of financial market continued to progress and the
RMB exchange rate formation regime was further improved.
I. New Policies on the Cross-border RMB Settlements
In February 2020, the PBC together with MOF, CBIRC, CSRC and SAFE jointly issued
the Notice on Further Strengthening Financial Support for Containing COVID-19 Outbreak
(PBC Document [2020]No.29), which streamlined the procedures of cross-border RMB
businesses related to pandemic containment, and supported the financial services for
more efficient cross-border RMB businesses.
In December 2020, the PBC together with NDRC, MOFCOM, SASAC, CBIRC and
SAFE jointly issued the Notice on Further Optimizing the Cross-border RMB Policies
to Stabilize Foreign Trade and Investment (PBC Document [2020] No.330), further
improving the fundamental operational policies to sovle the problems market entities
met when using the RMB to settle the internation trade and investment.
Box 7
New Cross-border RMB Settlement Policies to Preserve Foreign
Trade and Investment
In December 2020, the PBC together with NDRC, MOFCOM, SASAC, CBIRC and
SAFE jointly issued the Notice on Further Optimizing the Cross-border RMB Policies to
Stabilize of Foreign Trade and Investment (PBC Document [2020] No.330, hereinafter
referred to as the Notice). The Notice closely focused on the needs of the real economy
and proposed a series of facilitation measures.
Firstly, it promoted a higher level of RMB settlement facilitation in trade and
investment, including expanding the pilot program of a higher level of trade and
investment facilitation to nationwide, supporting cross-border RMB settlement for
PART THREE
Policies and Relevant Reforms
27
e-commerce trade, and requiring banks timely to adjust business processing and review
request in line with the latest reform.
Secondly, it simplified the cross-border RMB settlement process, including improving
the creation of the supervisory watch list for cross-border RMB transactions, supporting
electronic review of documentation, optimizing the centralized cross-border RMB
payments and receipts under current account for multinational enterprise groups, and
piloting cross-border RMB settlement facilitation nationwide for qualified contractors
engaged in international engineering services.
Thirdly, it optimized the management of cross-border RMB investment and financing,
including relaxing restrictions on the use of certain RMB capital-account receipts,
facilitating domestic reinvestment by foreign-invested enterprises, canceling the requirement
of special account management for foreign direct investment, improving and simplifying the
management of overseas RMB borrowing and lending by domestic enterprises.
Fourthly, it facilitated the use of RMB remittances from Hong Kong and Macao. Hong Kong
and Macao residents could enjoy a more convenient payment and employment of the funds
when traveling or living in mainland China.
Fifthly, it facilitated the use of RMB funds channeled from overseas forforeign entities who
have open non-resident RMB account onshore.
II. Further Opening-up of the Capital Market
In May 2020, the PBC and SAFE jointly issued the Regulations on Funds of Securities and
Futures Investment by Foreign Institutional Investors (PBC, SAFE Public Announcement
[2020] No.2), to standardize and simplify administrative requirements on domestic
funds of securities and futures investment by foreign institutional investors, aiming to
better facilitate foreign investors’ participation in financial market of China.
In September 2020, the PBC, China Banking and Insurance Regulatory Commission
(CBIRC) and State Administration of Foreign Exchange (SAFE) jointly released the
Measures for the Administration of Domestic Securities and Futures Investment by Qualified
2021 RMB INTERNATIONALIZATION REPORT
28
Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors (CSRC,
PBC, and SAFE Decree No.176), which integrated relative institutions and supporting
rules for QFII and RQFII, expanded market access and investing scope, and improved
custodians management.
Box 8
The Launch of the Cross-Boundary Wealth Management Connect
Pilot Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area
The Cross-Boundary Wealth management Connect Scheme (Cross-boundary WMC)
refers to individual residents in the Guangdong-Hong Kong-Macao Greater Bay
Area (GBA) investing in eligible investment products distributed by banks in each
other’s market through a closed-loop funds flow channel established between their
respective banking systems. The Cross-boundary WMC consists of the Southbound
Scheme and the Northbound Scheme, depending on the identity of the investors.
The Southbound Scheme refers to residents in the Mainland GBA cities investing
in eligible investment products distributed by banks in Hong Kong and Macao via
designated channels; the Northbound Scheme refers to residents in Hong Kong and
Macao investing in eligible investment products distributed by Mainland banks in
the GBA cities via designated channels.
In June 2020, the People’s Bank of China, the Hong Kong Monetary Authority,
and the Monetary Authority of Macao jointly announced The Launch of the Cross-
boundary Wealth Management Connect Scheme in the Guangdong-Hong Kong-Macao
Greater Bay Area. In February 2021, the People’s Bank of China, China Banking and
Insurance Regulatory Commission, China Securities Regulatory Commission, State
Administration of Foreign Exchange, Hong Kong Monetary Authority, Securities and
Futures Commission of Hong Kong, and Monetary Authority of Macao jointly signed
the Memorandum of Understanding on the Launch of the Cross-Boundary Wealth
Management Connect Scheme in the Guangdong-Hong Kong-Macao Greater Bay
Area. The authorities had agreed on the principles of supervisory cooperation under
the cross-boundary Wealth Management Connect. In September 2021, the authorities
in Guangdong
，
Hong Kong and Macao simultaneously promulgated Implementation
Arrangements for the Cross-Boundary Wealth Management Connect Pilot Scheme in
the Guangdong-Hong Kong-Macao Greater Bay Area , marking the formal launch of the
Cross-Boundary WMC.
PART THREE
Policies and Relevant Reforms
29
The Cross-Boundary WMC is an important measure to implement the strategic
deployment of the CPC Central Committee and the State Council to support the
development of Guangdong-Hong Kong-Macao Greater Bay Area, as well as the
Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area.
It is conducive to a quality living environment within the Greater Bay Area, the
advancement of the interconnectivity of financial markets in the Greater Bay Area, the
promotion of the two-way opening-up of the Mainland’s financial markets, and the
development of Hong Kong as the international financial center.
III. Exchange Rate Formation Regime
In 2020, the PBC continued to deepen the market-based reform of the RMB exchange
rates and to improve the managed floating exchange rate regime based on market
supply and demand with reference to a basket of currencies. It maintained the
flexibility of the RMB exchange rates and gave play to the role of the exchange rate as
an automatic stabilizer in adjusting the macro-economy and the balance of payments.
In the first 5 months of 2020, affected by the COVID-19 pandemic, the international
foreign exchange market volatility increased. The RMB exchange rate showed strong
resilience, depreciated against the US dollar, and appreciated slightly against a basket
of currencies. As China among the first to contain the virus, and Chinese economic
fundamentals continued to improve, the RMB exchange rate appreciated against the
US dollar and a basket of currencies after June. In October, the counter-cyclical factor
faded out of the central parity quotation model of the RMB against the US dollar.
The improvement in the transparency, benchmark and effectiveness of the central
parity formation regime after its adjustment was also the embodiment of the role of
market participants in the Foreign Exchange Self-disciplinary Mechanism. Overall, in
2020, the cross-border capital flows and foreign exchange supply and demand were
basically balanced, and the market expectations remained generally stable. Based on
market supply and demand, the RMB exchange rate experienced both depreciation
and appreciation, and remained basically stable at a reasonable and equilibrium level.
2021 RMB INTERNATIONALIZATION REPORT
30
PART FOUR
Offshore RMB Market
I
n 2020, the offshore RMB market maintained a healthy and steady development.
The interest rate spread of RMB between the onshore and offshore markets
narrowed, and the exchange rates of onshore and offshore RMB steadily
appreciated with a generally consistent trend. The offshore RMB-denominated
financial products were increasingly enriched with a constantly widened and
deepened offshore RMB market.The interaction between onshore and offshore
market further strengthened.
I. Interest Rate and Exchange Rate
1. Interest Rate
In 2020, the offshore RMB interest rate remained generally stable, and the differentials
of different maturities tended to be obvious: the fluctuation of short-term interest rates
increased while that of long-term interest rates fell overall. At the end of 2020, Hong
Kong Interbank Offered Rate (HIBOR) for overnight and 7-day lending fixing rate of
RMB were 4.03% and 2.96% respectively, 210 and 56 basis points higher than those at
the end of 2019 respectively, and the 3-month, 6-month and 1-year HIBOR were 2.88%,
2.94% and 3.07% respectively, dropping 38, 34 and 28 basis points from the end of
2019 respectively.
In 2020, the interest rate of offshore market was overall higher than that of the onshore
market with the HIBOR 0.39% higher than the SHIBOR on average. The spread
between the HIBOR and the SHIBOR for 1-month and 3-month periods narrowed
from 48 and 61 basis points in the first half of the year to 27 and 20 basis points in the
second half of the year respectively.
PART FOUR
Offshore RMB Market
31
Figure 4-1
Movements in HK Offshore RMB Lending Rate in 2020 (1)
Source: Hong Kong Association of Banks.
Figure 4-2
Movements in HK Offshore RMB Lending Rate in 2020(2)
Source: Hong Kong Association of Banks.
2. Exchange Rate
In 2020, the exchange rate of the offshore RMB featured significant two-way
fluctuations, generally remaining consistent with the exchange rate of the onshore
RMB, the exchange rate spread between the onshore and offshore RMB was stable
overall. In the first half of 2020, the offshore RMB generally depreciated with the
2021 RMB INTERNATIONALIZATION REPORT
32
minimum of 7.17. In the second half of the year, the offshore RMB appreciated
gradually, closing at 6.50 at the end of the year, appreciating by 7.1% from the end
of the last year. The 1-year Non-deliverable Forward (NDF) quotation generally
appreciated, with an appreciation of 5.6% for the whole year, and the rate of implied
devaluation fluctuated in two ways during the year, reaching 0.4% at the end of the
year, 30 basis points higher than that at the beginning of the year. The trading days
that the exchange rate of offshore RMB was stronger or weaker than that of onshore
RMB during the year were roughly the same. The average daily exchange rate spread
between offshore and onshore RMB of the year was 114 basis points, increased by 11
basis points from 2019.
Figure 4-3
Movements in Exchange Rate of CNH/USD
Source: PBC, Reuters.
II. Offshore RMB Deposits
In 2020, the offshore RMB deposits steadily increased. By the end of 2020, the RMB
deposits in major offshore RMB markets exceeded 1.27 trillion yuan. Among them, the
RMB deposits in Hong Kong SAR of China was RMB 720.90 billion yuan, ranking 1st
in offshore RMB markets, with a yoy increase of 14.2%, accounting for 5.9% of the total
amount of deposits and 11.9% of foreign currencies deposits in Hong Kong SAR of
China. The RMB deposits in Taiwan province of China was RMB 244.09 billion yuan,
ranking 2nd in offshore RMB markets, with a yoy decrease of 6.5%, accounting for 2.7%
PART FOUR
Offshore RMB Market
33
of the total deposits and 9.8% of foreign currencies deposits in Taiwan province of
China. The RMB deposits in the United Kingdom was RMB 64.56 billion yuan, ranking
3rd in offshore RMB markets.
Figure 4-4
RMB-denominated Deposits and Loans in HK
Source: Hong Kong Monetary Authority (HKMA).
Figure 4-5
Offshore RMB-denominated Deposits
Source: PBC.
2021 RMB INTERNATIONALIZATION REPORT
34
III. Offshore RMB-denominated Financing
In 2020, the overall scale of offshore RMB loans remained generally stable, and the
amount of outstanding RMB loans in major offshore markets was RMB 528.55 billion
yuan. Among them, the amount of outstanding RMB loans in Hong Kong SAR of
China was RMB 152.00 billion yuan, ranking 1st in all offshore markets. Singapore
ranked 2nd with the amount of RMB 118.90 billion yuan and Macao SAR of China
ranked 3rd with the amount of 105.36 billion yuan.
In 2020, the offshore RMB-denominated bond market developed steadily. Incomplete
statistics showed that the total issuance of the RMB-denominated bonds in countries
and regions, where overseas RMB clearing arrangements established, amounted to
RMB 331.96 billion yuan in 2020, with a yoy increase of 14.2%. The RMB-denominated
bonds issued in Hong Kong SAR of China amounted to RMB 270.74 billion yuan,
increasing 11.1% yoy. By the end of 2020, the outstanding amount of the RMB-
denominated bonds in countries and regions with RMB clearing arrangements was
RMB 264.87 billion yuan, with a yoy decrease of 11.9%.The balance of the RMB-
denominated Certificates of Deposits (CDs) amounted to RMB 122.15 billion yuan,
with a yoy increase of 38.2%.
IV. Issuance of RMB-Denominated Central-Bank Bills
In 2020, the PBC issued RMB-denominated central-bank bills in Hong Kong SAR of
China markets regularly, further optimized the issuance structure of central-bank
bills of different maturities, and improved the market vigorousness of offshore RMB-
denominated central-bank bills. The PBC issued 12 batches of RMB-denominated
central-bank bills including maturities of 3-month bills, 6-month bills and 1-year bills,
with total amounts of 155.00 billion yuan in Hong Kong SAR of China. The RMB-
denominated central-bank bills issued in Hong Kong SAR of China were welcomed
by offshore investors, and the total bid-to-cover ratio of each issue tender exceeded
2.1 with the peak of 3.6 in 2020. Foreign investors comprise international financial
organizations, central banks, sovereign funds, commercial banks, funds, insurance
companies and other overseas investors, with geographical distribution covering
Hong Kong SAR of China, Macao SAR of China, Taiwan province of China, Asia-
Pacific, Europe, Africa and other regions.
PART FOUR
Offshore RMB Market
35
On January 27, 2021, Bank of China (Hong Kong) launched the market-making
mechanism for the repurchase of RMB-denominated central-bank bills in Hong Kong
SAR of China, providing quotations for overnight, one-week, two-week, one-month,
two-month and three-month repurchase and reverse repurchase of RMB-denominated
central-bank bills. As of July 2021, Bank of China (Hong Kong) had conducted 284
transactions with a total amount of RMB 73.40 billion yuan. The repurchase market-
making mechanism provides convenience for investors to use RMB-denominated
central-bank bills issued in Hong Kong SAR of China for liquidity management, and
facilitates the development of the offshore RMB currency market in Hong Kong SAR
of China.
The issuance of the RMB-denominated central-bank bills in Hong Kong SAR of
China provides overseas investors with sovereign credit rating of high quality RMB-
denominated investment products. It enriches the liquidity management tools of the
RMB-denominated market in Hong Kong SAR of China, improves the yield curve of
the RMB-denominated bonds in Hong Kong SAR of China, and encourages domestic
and overseas market participants to issue the RMB-denominated bonds and conduct
RMB business in offshore markets, thereby facilitating the sustainable and healthy
development of the offshore RMB market.
V. The RMB in Global FX Market
The RMB ranked fifth in terms of foreign exchange spot transactions, according to a
report released by Society for Worldwide Interbank Financial Telecommunications
(SWIFT) in June 2021, following the US dollar, the Euro, the British pound and the
Japanese yen. The main countries and regions for foreign exchange spot transactions
in RMB included the United Kingdom (with a settlement proportion of 36.7%),
the United States (with a settlement proportion of 14.4%), and China (excluding
Hong Kong SAR of China, Macao SAR of China, Taiwan province of China) (with a
settlement proportion of 11.0%) respectively.
a
According to the SWIFT statistics, RMB
was one of the most active currencies in foreign exchange markets globally. At present,
the RMB trading amount in the United Kingdom, the United States, Hong Kong SAR
a
Most of the transactions in the Chinese market (excluding Hong Kong SAR of China, Macan SAR of
China, Taiwan province of China) use the confirmation service of China Foreign Exchange Trading System,
and only a few of them use SWIFT MT300 message.
2021 RMB INTERNATIONALIZATION REPORT
36
of China and France ranked top four in the offshore markets, accounting for over 80%
of the offshore RMB trading volume in total.
VI. Offshore RMB Clearing
In 2020, the RMB clearing amount of overseas RMB clearing banks had totaled in
RMB 369.49 trillion yuan with a yoy increase of 6.1%, among which the clearing
amount on behalf of clients and for the interbank had been RMB 37.63 trillion yuan
and RMB 331.86 trillion yuan respectively, with each yoy increase respectively at
15.0% and 5.2%. By the end of 2020, 907 participating banks and other institutions
had opened clearing accounts in overseas clearing banks. In 2020, the RMB clearing
amount conducted by Hong Kong Real Time Gross Settlement (RTGS) added up to
RMB 282.48 trillion yuan and continued its rapid growth with a yoy increase of 6.3%.
PART FIVE
Prospect
37
PART FIVE
Prospect
I
n the next phase, the PBC will adhere to the guidance of Xi Jinping Thought on
Socialism with Chinese Characteristics for a New Era, and resolutely implement
the decisions and arrangements of the CPC Central Committee and the State
Council. The PBC will advance the opening-up reform to facilitate the international
use of the RMB in a steady and prudent manner, and strike a balance well between
development and security. The PBC will conform to market-driven principles and
respect the choices of market entities while further improving the policies and
infrastructures for the cross-border use of the RMB. Work will be done to streamline
the procedures of cross-border RMB settlement, to promote the two-way opening-
up of financial markets and to develop the offshore RMB market, thereby creating
a more convenient environment for market entities to use the RMB. Meanwhile,
the PBC will further improve the macro-prudential management framework for
cross-border capital flows, strengthen the work on monitoring, analysis and early-
warning of the cross-border capital flows, and ensure that no systemic risk would be
triggered by regulatory misconduct, so as to better serve the establishment of a new
development paradigm.
I. The cross-border Use of the RMB in Current Account Transactions Will Be
Further Expanded
The cross-border use of the RMB in current account transactions is an important
foundation for the RMB internationalization. The signing of the Regional
Comprehensive Economic Partnership (RCEP) will further enhance the development
of trade in the Asia-Pacific region, and enlarge the room for the use of the RMB in
trade and investment activities. The use of the RMB in commodity trade already had
a good start and is expected to be a growth pillar for the cross-border use of the RMB.
New trade modes such as the cross-border e-commerce will enrich the scenarios of the
use of the RMB and promote the use in foreign trade.
2021 RMB INTERNATIONALIZATION REPORT
38
II. The Channels of the RMB Cross-border Investment and Financing Will Be
Further Facilitated
The PBC will continue to promote the two-way opening of the financial market
and enrich FX risk hedging tools, thus facilitating foreign entities to allocate the
RMB financial assets. Work will be done to support foreign central banks, monetary
authorities and reserve management departments to allocate the RMB reserve
assets. Focusing on the construction of the pilot free trade zone (free trade port), the
Guangdong-Hong Kong-Macao Greater Bay Area and the Shanghai International
Financial Center, the PBC will further promote pilot initiatives to use the RMB in
cross-border investment and financing business.
III. The Bilateral Monetary Cooperation Will Proceed Steadily
The PBC will steadily promote bilateral local currency swap, optimize the framework
of local currency swap, and make the swap play its role in supporting the development
of the offshore RMB market and promoting trade and investment facilitation. The
PBC will strengthen local currency settlement cooperation with other central banks,
especially central banks in the neighboring countries and countries along the B&R,
so as to create a better environment for the use of the RMB abroad. The PBC will
continue to facilitate the direct trading of the RMB against the currencies of relevant
countries when the time is right and support foreign countries to use the RMB in local
foreign exchange markets.
IV. The RMB Internationalization Infrastructure Will Be Further Improved
The PBC plans to make overseas RMB clearing banks fully play the role of facilitating
RMB investment and financing, cultivating offshore RMB markets and offering
adequate RMB liquidity. The PBC will put more strength on the construction of the
CIPS, enhancing the security and efficiency of the RMB clearing and settlement, as
well as the building of the RMB Cross-border Payment and the Receipt Information
Management System (RCPMIS) , so as to do better on the statistics collection and
analysis.
PART FIVE
Prospect
39
Box 9
Market Survey on the International Use of the RMB
In 2020, the Bank of China conducted a market survey on the current status, inclination
and future expectations about the use of the RMB by the industrial and commercial
businesses and financial institutions from home and abroad, with nearly 3,300
participants engaged, of which about 2,500 participants were at home and 800 foreign
participants were from 32 countries and regions abroad. The survey shows that:
Firstly, the role of the RMB as the settlement currency had been further consolidated.
There were about 78.8% of the respondents considering using the RMB in cross-border
transactions or increasing the frequency of the use, and that proportion increased
compared with recent years.
Figure 5-1
Share of Respondents Considering Increasing Use of the RMB
Source: Bank of China.
Secondly, the role of the RMB as a denominating currency had been brought into play
at a preliminary level. The survey results showed that 20.5% of domestic respondents
expressed their insistence on using the RMB to denominate in cross-border transactions,
indicating a proportion that had increased slightly from 2019. The share of respondents
that stuck to using the RMB for dominating has increased by 4 percentage point
compared to 2015, while the share of those using compromise pricing to mitigate
exchange rate risk had decreased by 4 percentage point.
2021 RMB INTERNATIONALIZATION REPORT
40
Figure 5-2
Share of Respondents Using RMB-denomination during FX Fluctuation
Source: Bank of China.
Thirdly, the role of the RMB in financing also played a part in international business,
especially under certain tight circumstances. The results of 2020 survey showed that about
78.1% of the foreign industrial and commercial respondents indicated that they would
consider using the RMB for financing while encountering tight liquidity of international
currencies such as the USD and the EUR. Although this ratio had fallen slightly according
to the 2019 survey, it was still maintained at a relatively high level in the past 5 years. The
results of both the 2020 and 2019 surveys demonstrated that the level of interest rates and
the cost of controlling the exchange rate risk of the RMB against domestic currency were
the two main factors that foreign industrial and commercial enterprises most concerned
about when considering whether to use the RMB for trade financing.
Figure 5
-
3
Share of Respondents Considering RMB-denominated Financing
Source: Bank of China.
PART SIX
Highlights of RMB Internationalization
41
PART SIX
Highlights of RMB Internationalization
2009
On January 20, the PBC and the Hong Kong Monetary Authority signed a bilateral
local currency swap agreement of RMB 200 billion yuan/HKD 227 billion.
On February 8, the PBC and the Bank Negara Malaysia signed a bilateral local
currency swap agreement of RMB 80 billion yuan/MYR 40 billion.
On March 11, the PBC and the National Bank of the Republic of Belarus signed a
bilateral local currency swap agreement of RMB 20 billion yuan/BYR 8 trillion.
On March 23, the PBC and Bank Indonesia signed a bilateral local currency swap
agreement of RMB 100 billion yuan/IDR 175 trillion.
On April 2, the PBC and the Central Bank of Argentina signed a bilateral local
currency swap agreement of RMB 70 billion yuan/ARS 38 billion.
On April 20, the PBC and the Bank of Korea signed a bilateral local currency swap
agreement of RMB 180 billion yuan/KRW 38 trillion.
On June 29, the PBC and the Hong Kong Monetary Authority signed the Supplementary
Memorandum III of Cooperation on the Pilot Program of RMB Settlement of Cross-
border Trade Transactions between Mainland and Hong Kong SAR of China.
On July 1, upon the approval of the State Council, the PBC, Ministry of Finance (MOF),
Ministry of Commerce (MOFCOM), General Administration of Customs (GAC),
State Administration of Taxation (SAT) and China Banking Regulatory Commission
2021 RMB INTERNATIONALIZATION REPORT
42
(CBRC) jointly issued the Administrative Rules on the Pilot Program of RMB Settlement
of Cross-border Trade Transactions (PBC, MOF, MOFCOM, GAC, SAT, CBRC Public
Announcement [2009] No.10).
On July 3, the PBC and the Bank of China (Hong Kong) Ltd. signed the revised RMB
Clearing Agreement, to support pilot program of RMB settlement of cross-border trade
transactions.
On July 3, the PBC issued the Regulations for Implementing the Administrative Rules of the
Pilot Program of RMB Settlement of Cross-border Trade Transactions (PBC Document [2009]
No.212).
On July 6, the first transaction of RMB cross-border trade settlement was conducted
in Shanghai, and the RMB Cross-border Payment Information Management System
(RCPMIS) was put into operation.
On July 7, the pilot program of RMB settlement of cross-border trade transactions was
launched in four cities of Guangdong.
On July 14, the PBC, MOF, MOFCOM, GAC, SAT and CBRC jointly issued the notice
to the Shanghai municipal government and Guangdong provincial government the
approval of Enterprises list for the Pilot Program of RMB Settlement of Cross-border
Trade Transactions (PBC General Administration Reply letter [2009] No.472). The first
batch of 365 enterprises was officially approved to conduct RMB settlement of export
transactions.
On September 10, the PBC and the SAT signed the Memorandum on data and
information transmission on the RMB settlement of cross-border trade transactions.
On September 15, the MOF issued the first sovereign RMB-denominated bond in
Hong Kong SAR of China with the amount of RMB 6 billion yuan.
On December 22, the PBC issued Questions & Answers on relevant policies of the pilot
program of RMB settlement of cross-border trade transactions.
PART SIX
Highlights of RMB Internationalization
43
2010
On February 11, the Hong Kong Monetary Authority issued the Elucidation of
Supervisory Principles and Operational Arrangements Regarding the RMB Business in Hong
Kong SAR of China.
On March 8, the PBC issued the Interim Administrative Rules for the RMB Cross-border
Payment Management Information System (PBC Document [2010] No.79).
On March 19, the PBC and the GAC signed the Memorandum of Cooperation on the RMB
Settlement of Cross-border Trade Transactions.
On March 24, the PBC and the National Bank of the Republic of Belarus signed a
bilateral local currency settlement arrangement.
On June 9, the PBC and the Central Bank of Iceland signed a bilateral local currency
swap agreement of RMB 3.5 billion yuan/ISK 66 billion.
On June 17, the PBC, MOF, MOFCOM, GAC, SAT and CBRC jointly issued
the Notice on Expanding the Pilot Program of RMB Settlement of Cross-border Trade
Transactions, to expand the scope of the pilot program (PBC Document [2010]
No.186).
On July 19, the PBC and the Hong Kong Monetary Authority signed the Supplementary
Memorandum IV of Co-operation on the Pilot Program of RMB Settlement of Cross-
border Trade Transactions. The PBC and BOC (Hong Kong) Ltd. signed the revised
RMB Clearing Agreement.
On July 23, the PBC and the Monetary Authority of Singapore signed a bilateral local
currency swap agreement of RMB 150 billion yuan/SGD 30 billion.
On August 17, the PBC issued the Notice Concerning the Pilot Program on Investment
in the Interbank Bond Market with RMB Funds by Three Types of Institutions Including
Overseas RMB Clearing Banks (PBC Document [2010] No.217).
2021 RMB INTERNATIONALIZATION REPORT
44
On August 19, with the authorization of the PBC, China Foreign Exchange Trade
System (CFETS) announced that it would improve the trading mode of RMB against
Malaysian ringgit and launch direct trading between the two currencies in the
interbank foreign-exchange market.
On August 31, the PBC issued the Administrative Rules for RMB Bank Settlement
Accounts of Overseas Institutions (PBC Document [2010] No.249).
On November 22, with the authorization of the PBC, China Foreign Exchange Trade
System (CFETS) announced that it would improve the trading mode of yuan against
Russian ruble and launch direct trading between the two currencies in interbank
foreign-exchange market.
2011
On January 6, the PBC issued the Administrative Rules for the Pilot Program of Settlement
for RMB-denominated Outward Direct Investment (PBC Public Announcement [2011]
No.1), allowing banking institutions and enterprises in the pilot areas to conduct the
RMB settlement of foreign direct investment transactions, and banking institutions to
grant loans to overseas projects based on relative regulations.
On April 18, the PBC and the Reserve Bank of New Zealand signed a bilateral local
currency swap agreement of RMB 25 billion yuan/NZD 5 billion.
On April 19, the PBC and the Central Bank of Republic of Uzbekistan signed a
bilateral local currency swap agreement of RMB 700 million yuan/UZS 167 billion.
On May 6, the PBC and the Bank of Mongolia signed a bilateral local currency swap
agreement of RMB 5 billion yuan/MNT 1 trillion.
On June 3, the PBC issued the Notice on Specifying the Issues Relating to Cross-border
RMB Business (PBC Document [2011] No.145).
On June 9, fudian Bank of Kunming and the Public Bank of Laos jointly launched the
PART SIX
Highlights of RMB Internationalization
45
over-the-counter trading between RMB and LAK.
On June 13, the PBC and the National Bank of Kazakhstan signed a bilateral local
currency swap agreement of RMB 7 billion yuan/KZT 150 billion.
On June 23, the PBC and the Central Bank of Russian Federation renewed the
agreement on Payment and Settlement, which extended the coverage of local currency
settlement from transactions in the border areas to general trade transactions between
the two countries.
On June 28, ICBC Guangxi Branch launched the trading of RMB against Vietnamese
Dong, while BOC Xinjiang Branch launched the trading of RMB against Kazakhstan
Tenge on the same day.
On June 30, Bank of Communications Qingdao Branch and Industrial Bank of Korea
Qingdao Branch launched the over-the-counter (OTC) trading of RMB against Korea
won.
On July 27, the PBC, MOF, MOFCOM, GAC, SAT and CBRC jointly issued the Circular
on Geographical Expansion of the RMB Settlement of Cross-border Trade Transactions (PBC
Document [2011] No.203). It expanded the program to the entire mainland China.
On October 13, the PBC issued the Administrative Rules on Settlement of RMB-
denominated Foreign Direct Investment (PBC Public Announcement [2011] No.23).
On October 24, the PBC issued the Guidelines on RMB Loans of Domestic Banking
Institutions for Overseas Projects (PBC Document [2011] No.255).
On October 26, the PBC and the Bank of Korea renewed the bilateral local currency
swap arrangement, increasing its size from RMB 180 billion yuan/KRW 38 trillion to
RMB 360 billion yuan/KRW 64 trillion.
On November 4, according to the principles and standards for RMB clearing bank in
Hong Kong SAR of China set by PBC Public Announcement [2003] No.16, the PBC
2021 RMB INTERNATIONALIZATION REPORT
46
authorized BOC (Hong Kong) Ltd. to resume the role of the RMB clearing bank in
Hong Kong SAR of China (PBC Public Announcement [2011] No.25).
On November 22, the PBC and Hong Kong Monetary Authority renewed the bilateral
local currency swap agreement, increasing its size from RMB 200 billion yuan/HKD
227 billion to RMB 400 billion yuan/HKD 490 billion.
On December 16, the CSRC, PBC and SAFE jointly issued the Measures on the Pilot
Program for RQFII-licensed Fund Management Companies and Securities Companies’
Domestic Securities Investments (CSRC Decree No.76).
On December 22, the PBC and the Bank of Thailand signed a bilateral local currency
swap agreement of RMB 70 billion yuan/THB 320 billion.
On December 23, the PBC and the State Bank of Pakistan signed a bilateral local
currency swap agreement of RMB 10 billion yuan/PKR 140 billion.
On December 29, the direct trading of RMB against THB in the local interbank
foreign-exchange market was launched in Yunnan Province, which was the first case
of direct trading of RMB against regional currencies.
On December 31, the PBC issued the Notice on the Implementation of the Measures for the
Pilot Program Allowing Fund Management Companies and Securities Companies Approved
as RMB Qualified Foreign Institutional Investors (RQFII) to Invest in the Domestic Securities
Market (PBC Document [2011] No.321).
2012
On January 17, the PBC and the Central Bank of the United Arab Emirates signed a
bilateral local currency swap agreement of RMB 35 billion yuan/AED 20 billion.
On February 6, the PBC, MOF, MOFCOM, GAC, SAT and CBRC jointly issued the
Notice on Issues Concerning RMB Settlement of Goods Export by Domestic Enterprises (PBC
Document [2012] No.23).
PART SIX
Highlights of RMB Internationalization
47
On February 8, the PBC and the Bank Negara Malaysia renewed the bilateral local
currency swap agreement, increasing its size from RMB 80 billion yuan/MYR 40
billion to RMB 180 billion yuan/MYR 90 billion.
On February 21, the PBC and the Central Bank of the Republic of Turkey signed a
bilateral currency swap agreement of RMB 10 billion/TRY 3 billion.
On March 20, the PBC and the Bank of Mongolia signed a supplemental bilateral local
currency swap agreement, increasing its size from RMB 5 billion yuan/MNT 1 trillion
to RMB 10 billion yuan/MNT 2 trillion.
On March 22, the PBC and the Reserve Bank of Australia signed a bilateral local
currency swap agreement of RMB 200 billion yuan/AUD 30 billion.
On April 3, with the approval of the State Council, the RQFII quota for Hong Kong
SAR of China was increased by RMB 50 billion yuan.
On June 1, with the authorization of the PBC, the China Foreign Exchange Trade
System (CFETS) announced that it would improve the trading mode between RMB
against JPY and launch the direct trading between the two currencies in the Chinese
interbank foreign-exchange market.
On June 26, the PBC and the National Bank of Ukraine signed a bilateral local
currency swap agreement of RMB 15 billion yuan/UAH 19 billion.
On June 29, the PBC issued the Circular of Specifying the Operational Rules for RMB
Settlement in Foreign Direct Investments (PBC Document [2012] No.165).
On July 31, the PBC issued the Notice on the Issues Concerning the Opening and Using of
RMB Settlement Account by Overseas Institutions (PBC Document [2012] No.183).
On August 31, the PBC and the monetary authority of Taiwan Province of China
signed the Memorandum of Understanding on the Currency Clearing Cooperation across the
Taiwan Straits.
2021 RMB INTERNATIONALIZATION REPORT
48
On September 24, the PBC and BOC Macao Branch renewed the RMB Clearing
Agreement.
On November 13, with the approval of the State Council, the pilot quota for RQFII in
Hong Kong SAR of China was increased by RMB 200 billion yuan.
On December 11, the PBC authorized BOC Taipei Branch to serve as the RMB clearing
bank in Taiwan Province of China.
2013
On January 25, the PBC and Taipei Branch of BOC signed the RMB Clearing
Agreement.
On February 8, the PBC authorized the Singapore Branch of ICBC to serve as the RMB
clearing bank in Singapore, and the two parties signed the RMB Clearing Agreement in
April.
On March 1, the CSRC, PBC and SAFE jointly issued the Measures on the Pilot Program
of Securities Investment in China by RMB Qualified Foreign Institutional Investors (CSRC
Decree No.90).
On March 7, the PBC and the Monetary Authority of Singapore renewed the bilateral
local currency swap agreement of RMB 300 billion yuan/SGD 60 billion.
On March 13, the PBC issued the Notice on the Issues Regarding Investment in the
Interbank Bond Market by Qualified Foreign Institutional Investors (PBC Document [2013]
No.69).
On March 26, the PBC and the Central Bank of Brazil signed a bilateral local currency
swap agreement of RMB 190 billion yuan/BRL 60 billion.
On April 10, with the authorization of the PBC, the China Foreign Exchange Trade
System (CFETS) announced that it would improve the trading mode between RMB
PART SIX
Highlights of RMB Internationalization
49
against Australian dollar and launch direct trading between the two currencies in the
interbank foreign-exchange market.
On April 25, the PBC issued the Notice on the Issues Concerning the Implementation of the
Measures for the Pilot Program of Securities Investment in China by RMB Qualified Foreign
Institutional Investors (PBC Document [2013] No.105).
On June 21, the Cross-Strait Service Trade Agreement (the Agreement) was signed by
both sides of the Taiwan Strait. According to the Agreement, Taiwan-funded financial
institutions would be allowed to invest in Mainland capital market with an investment
quota of RMB 100 billion yuan.
On June 22, the PBC and the Bank of England signed a bilateral local currency swap
agreement of RMB 200 billion yuan/GBP 20 billion.
On July 9, the PBC issued the Notice on Simplifying the Procedures for Cross-border RMB
Services and Improving Relevant Policies (PBC Document [2013] No.168).
On August 23, the General Administration Department of the PBC issued the Notice
on Improving the Information Reporting Procedures of the RMB Cross-border Payment
Management Information System (RCPMIS) (PBC General Administration Department
Document [2013]No.188).
On September 9, the PBC and the Magyar Nemzeti Bank (Hungarian National Bank)
signed a bilateral local currency swap agreement of RMB 10 billion yuan/HUF 375
billion .
On September 11, the PBC and the Central Bank of Iceland renewed the bilateral local
currency swap agreement of RMB 3.5 billion yuan/ISK 66 billion.
On September 12, the PBC and the Bank of Albania signed a bilateral local currency
swap agreement of RMB 2 billion yuan/ALL 35.8 billion.
On September 23, the PBC issued the Notice on the Issues Concerning the RMB
2021 RMB INTERNATIONALIZATION REPORT
50
Settlement for Investment in Domestic Financial Institutions by Overseas Investors (PBC
Document [2013] No.225).
On October 1, the PBC and Bank of Indonesia renewed the bilateral local currency
swap agreement of RMB 100 billion yuan/IDR 175 trillion.
On October 8, the PBC and the European Central Bank signed a bilateral local
currency swap agreement of RMB 350 billion yuan/EUR 45 billion.
On October 15, at the 5th China-UK Economic and Financial Dialogues, China
announced the RQFII program for UK with the quota of RMB 80 billion yuan.
On October 22, at the 10th meeting of the Sino-Singapore Joint Council for Bilateral
Cooperation, China announced the RQFII program for Singapore with the quota of
RMB 50 billion yuan.
On December 31, the PBC released the Notice on Adjusting the Administration of RMB
Sales and Purchases (PBC Document [2013] No.321).
2014
On March 14, the PBC, MOF, MOFCOM, GAC, SAT and CBRC jointly issued the
Notice on Simplifying the Procedures Concerning the RMB Settlement of Goods Export by
Domestic Enterprises (PBC Document [2014] No.80).
On March 19, with the authorization of PBC, the China Foreign Exchange Trade
System (CFETS) announced that it would improve the trading mode between RMB
and New Zealand dollar and launch direct exchange between the two currencies in
the interbank foreign-exchange market.
On March 26, China and France jointly announced that China would extend its RQFII
program to France with the quota of RMB 80 billion yuan.
On March 28, the PBC and Deutsche Bundesbank signed the Memorandum of
PART SIX
Highlights of RMB Internationalization
51
Understanding on establishing RMB clearing arrangements in Frankfurt.
On March 31, the PBC and Bank of England signed the Memorandum of Understanding
on establishing RMB clearing arrangements in London.
On April 25, the PBC and Reserve Bank of New Zealand renewed the bilateral local
currency swap agreement of RMB 25 billion yuan/NZD 5 billion.
On June 11, the PBC issued the Guidelines on Implementation of Opinions of the State
Council General Office on Supporting the Stable Growth of Foreign Trade (PBC Document
[2014] No.168).
On June 17, the PBC authorized China Construction Bank (London) Ltd. to serve as
the RMB clearing bank in London.
On June 18, the PBC authorized the Frankfurt Branch of BOC to serve as the RMB
clearing bank in Frankfurt.
On June 19, with the authorization of the PBC, the China Foreign Exchange Trade
System (CFETS) announced that it would improve the trading mode between RMB
and GBP and launch direct exchange between the two currencies in the interbank
foreign-exchange market.
On June 28, the PBC and the central bank of France signed the Memorandum of
Understanding on establishing RMB clearing arrangements in Paris. The PBC and
Central Bank of Luxembourg signed the Memorandum of Understanding on establishing
RMB clearing arrangements in Luxembourg.
On July 3, the PBC and Bank of Korea signed the Memorandum of Understanding
on establishing RMB clearing arrangements in Seoul. China declared to grant the
Republic of Korea an RQFII investment quota of RMB 80 billion yuan. On July 4, the
PBC authorized the Seoul Branch of Bank of Communications to serve as the RMB
clearing bank in Seoul.
2021 RMB INTERNATIONALIZATION REPORT
52
On July 7, during German Chancellor Merkel’s visit to China, Premier Li Keqiang
announced that China would extend its RQFII program to Germany, with the quota of
RMB 80 billion yuan.
On July 18, the PBC and the Central Bank of Argentina renewed the bilateral local
currency swap agreement of RMB 70 billion yuan/ARS 90 billion.
On July 21, the PBC and Swiss National Bank signed a bilateral local currency swap
agreement of RMB 150 billion yuan/CHF 21 billion.
On August 21, the PBC and Bank of Mongolia renewed the bilateral local currency
swap agreement of RMB 15 billion yuan/MNT 4.5 trillion.
On September 5, the PBC authorized the Paris Branch of BOC to serve as the RMB
clearing bank in Paris, and the Luxembourg Branch of ICBC to serve as the RMB
clearing bank in Luxembourg.
On September 16, the PBC and the Central Bank of Sri Lanka signed a bilateral local
currency swap agreement of RMB 10 billion yuan/LKR 225 billion.
On September 28, the PBC issued the Notice on Cross-border RMB Settlement of RMB-
denominated Debt Financing Instruments issued by Overseas Institutions in China (PBC
General Administration Document [2014] No.221).
On September 30, with the authorization of the PBC, the China Foreign Exchange
Trade System (CFETS) announced that it would improve the trading mode between
RMB and Euro and launch direct trading between the two currencies on the interbank
foreign-exchange market.
On October 11, the PBC and Bank of Korea renewed the bilateral local currency swap
agreement of RMB 360 billion yuan/KRW 64 trillion.
On October 13, the PBC and the Central Bank of Russian Federation signed a bilateral
local currency swap agreement of RMB 150 billion yuan/RUB 815 billion.
PART SIX
Highlights of RMB Internationalization
53
On November 1, the PBC issued the Notice Concerning Centralized Cross-border RMB
Fund Operation Conducted by Multinational Corporations (PBC Document [2014] No.324).
On November 3, the PBC and Qatar Central Bank signed the Memorandum of
Understanding on establishing RMB clearing arrangements in Doha, and signed a
bilateral local currency swap agreement of RMB 35 billion yuan/QAR 20.8 billion.
China announced the RQFII program for Qatar with a quota of RMB 30 billion yuan.
On November 4, the PBC authorized the Doha Branch of ICBC to serve as the RMB
clearing bank in Doha.
On November 4, the PBC and CSRC jointly issued the Notice on the Pilot Program of the
Shanghai-Hong Kong Stock Connecting Scheme (PBC Document [2014] No.336).
On November 5, the PBC issued the Notice on the Issues Concerning the Overseas
Securities Investment by RMB Qualified Domestic Institutional Investors (PBC Document
[2014] No.331).
On November 8, the PBC and Bank of Canada signed the Memorandum of
Understanding on establishing RMB clearing arrangements in Canada, and signed
a bilateral local currency swap agreement of RMB 200 billion yuan/CAD 30 billion.
China announced the RQFII program for Canada with a quota of RMB 50 billion yuan.
On November 9, the PBC authorized ICBC (Canada) Ltd. to serve as the RMB clearing
bank in Toronto.
On November 10, the PBC and Central Bank of Malaysia signed the Memorandum of
Understanding on establishing the RMB clearing arrangements in Kuala Lumpur.
On November 17, the PBC and Reserve Bank of Australia signed the Memorandum of
Understanding on establishing RMB clearing arrangements in Australia. China declared
to grant Australia an RQFII investment quota of RMB 50 billion yuan. On November
18, the PBC authorized the Sydney Branch of BOC to serve as the RMB clearing bank
in Sydney.
2021 RMB INTERNATIONALIZATION REPORT
54
On November 22, the PBC and Hong Kong Monetary Authority renewed the bilateral
local currency swap agreement of RMB 400 billion yuan/HKD 505 billion.
On December 14, the PBC and the National Bank of Kazakhstan renewed the bilateral
local currency swap agreement of RMB 7 billion yuan/KZT 200 billion. On December
15, with the authorization of the PBC, the China Foreign Exchange Trade System
(CFETS) announced that it would launch direct trading between RMB and KZT in the
local interbank foreign-exchange market.
On December 22, the PBC and Bank of Thailand signed the Memorandum of
Understanding on establishing RMB clearing arrangements in Thailand. PBC and Bank
of Thailand renewed the bilateral local currency swap agreement of RMB 70 billion
yuan/THB 370 billion.
On December 23, the PBC and State Bank of Pakistan renewed the bilateral local
currency swap agreement of RMB 10 billion yuan/PKR 165 billion.
2015
On January 5, the PBC authorized BOC (Malaysia) Ltd. and ICBC (Thailand) Ltd. to
serve as the RMB clearing bank in Kuala Lumpur and Bangkok respectively.
On January 21, the PBC and Swiss National Bank signed the Memorandum of
Understanding on establishing RMB clearing arrangements in Switzerland, granting
Switzerland an RQFII investment quota of RMB 50 billion yuan.
On March 18, the PBC and the Central Bank of Suriname signed a bilateral local
currency swap agreement of RMB 1 billion yuan/SRD 520 million.
On March 25, the PBC and the Central Bank of Armenia signed a bilateral local
currency swap agreement of RMB 1 billion yuan/AMD 77 billion.
On March 30, the PBC and the Reserve Bank of Australia renewed the bilateral local
currency swap agreement of RMB 200 billion yuan/AUD 40 billion.
PART SIX
Highlights of RMB Internationalization
55
On April 10, the PBC and the South African Reserve Bank signed a bilateral local
currency swap agreement of RMB 30 billion yuan/ZAR 54 billion.
On April 17, the PBC and the Bank Negara Malaysia renewed the bilateral local
currency swap agreement of RMB 180 billion yuan/MYR 90 billion.
On April 29, the pilot area of RQFII was expanded to Luxembourg with an investment
quota of RMB 50 billion yuan.
On May 10, the PBC and the National Bank of the Republic of Belarus renewed the
bilateral local currency swap agreement of RMB 7 billion yuan/ BYR 16 trillion.
On May 15, the PBC and the National Bank of Ukraine renewed the bilateral local
currency swap agreement of RMB 15 billion yuan/UAH 54 billion.
On May 25, the PBC and the Central Bank of Chile signed a Memorandum of
Understanding on establishing RMB clearing arrangements in Chile and a bilateral
local currency swap agreement of RMB 22 billion yuan/CLP 2.2 trillion. China
declared to grant Chile an RQFII investment quota of RMB 50 billion yuan. On the
same day, the PBC authorized the China Construction Bank’s Chile Branch to serve as
the RMB clearing bank in Chile.
On June 1, the PBC issued the Notice of the People’s Bank of China on Issues Concerning
the Repo Operation of Foreign RMB Clearing Banks and Foreign RMB Participant Banks in
the Interbank bond Market (PBC Document [2015] No.170).
On June 11, the PBC released RMB Internationalization Report (2015).
On June 27,the PBC and the Central Bank of Hungary signed the Memorandum of
Understanding on establishing RMB clearing arrangements in Hungary and the Agency
Agreement of Investment for the PBC to Manage the MNB’s Investment in China Interbank
Bond Market. On the same day, the two parties also agreed to include Hungary in the
pilot RQFII program with an investment quota of RMB 50 billion yuan. On June 28,
the PBC authorized Hungary branch of BOC to serve as the RMB clearing bank in
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Hungary.
On July 7, the PBC and the South African Reserve Bank signed the Memorandum of
Understanding on establishing RMB clearing arrangements in South Africa.
On July 8, the PBC authorized the Johannesburg Branch of BOC to serve as the RMB
clearing bank in South Africa.
On July 14, the PBC issued the Notice of the People’s bank of China on Issues
Concerning Investment of Foreign Central Banks, International Financial Institutions
and Sovereign Wealth Funds with RMB Funds in the Interbank Market (PBC Document
[2015] No.220).The regulation simplified the procedures of foreign central banks,
international financial institutions and sovereign wealth funds’ access to the
interbank market and the investment quota limit on these entities was removed.
These entities could freely choose the PBC or settlement agent of the interbank
market to serve as their agents for trading and settlement and more instruments
were available for them to invest.
On July 24, the PBC released an announcement on Issues Concerning RMB Cross-border
Settlement of Crude Oil Futures Trading on Onshore Market (PBC Public Announcement
[2015] No.19). It regarded RMB as the invoicing and settlement currency for domestic
crude oil futures, overseas traders and brokers were allowed to participate in Chinese
crude oil futures trading.
On August 11, the PBC released a statement on Improving the Quotation Mechanism
of Central Parity between the RMB against the USD. Since August 11, 2015, before the
opening quotation of the Interbank foreign-exchange market, market makers make
offers to China Foreign Exchange Trading Center referencing the closing exchange
rate in the Interbank foreign-exchange market on the previous day, the condition of
foreign exchange supply and demand along with changes in the exchange rate of
major international currencies comprehensively.
On September 3, the PBC and the National Bank of Tajikistan signed a bilateral local
currency swap agreement of RMB 3 billion yuan/Somoni 3 billion.
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On September 7, the PBC issued the Notice on Further Facilitating Multinational
Conglomerates in Conducting Two-way Cross-border RMB Cash Pooling Business (PBC
Document [2015] No.279).
On September 17, the PBC and the Central Bank of Argentina signed the Memorandum
of Understanding on establishing RMB clearing arrangements in Argentina.
On September 18, the PBC authorized ICBC (Argentina) Ltd. to serve as the RMB
clearing bank in Argentina.
On September 21, the PBC approved HSBC (Hong Kong and Shanghai Banking
Corporation) and BOC (Hong Kong) Ltd. to issue financial bonds in the interbank
bond market. This was the first time that the international commercial banks were
permitted to issue RMB-denominated bonds in interbank bond market.
On September 26, the PBC and the Central Bank of the Republic of Turkey renewed
the bilateral local currency swap agreement of RMB 12 billion yuan/Lira 5 billion.
On September 27, the PBC and the National Bank of Georgia signed the bilateral local
currency swap framework agreement.
On September 29, the PBC and the Central Bank of Zambia signed the Memorandum of
Understanding on establishing RMB clearing arrangements in Zambia. On September
30, The PBC authorized the Bank of China (Zambia) Limited to serve as the RMB
clearing bank in Zambia.
On September 29, the PBC and the National Bank of the Kyrgyz Republic signed an
agreement of intention on strengthening cooperation.
On September 30, the PBC released the PBC Public Announcement [2015] No.31.
Foreign central banks (monetary authorities), other official reserve management
organizations, international financial institutions and sovereign wealth fund were
allowed to trade in the Chinese interbank foreign-exchange market.
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On October 8, the CIPS (Phase one ) was launched successfully.
On October 20, the PBC issued RMB 5 billion yuan of 1-year central bank bills in
London in way of book-building, with a 3.1% coupon rate. This was the first time for
PBC issuing RMB-denominated central bank bills outside mainland China.
On October 20, the PBC and the Bank of England renewed the bilateral local currency
swap agreement of RMB 350 billion yuan/GBP 35 billion.
On November 2, the General Administration Department of the PBC issued the Notice
on Foreign Central Bank-Type Institutions to open the RMB Settlement Account in Domestic
Banking Financial Institutions (PBC General Administration Department Document
[2015] No.227). It facilitated foreign central banks (monetary authorities), other official
reserve management organizations, international financial institutions, and sovereign
wealth funds to conduct relative business onshore.
On November 6, the PBC and SAFE released the Operational Guideline for Funds
Management in Cross-border Issuance and Sales of Mainland and Hong Kong Securities
Investment Funds (The PBC SAFE Public Announcement [2015] No.36).
On November 9, the PBC authorized the CFETS to conduct direct trading between
RMB and Swiss franc in the interbank foreign-exchange market.
On November 18, China-Europe International Exchange Co., Ltd. held its
establishment ceremony, and launched the first batch of RMB-denominated spot
security products.
On November 23, the pilot program of RQFII was extended to Malaysia with an
investment quota of RMB 50 billion yuan.
On November 25, the first batch of foreign central banks finished filing with CFETS
and accessed the Chinese interbank foreign-exchange market.
On November 27, NAFMII accepted the registration of the Province of British
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Columbia of Canada to issue RMB 6 billion yuan RMB-denominated sovereign bonds
in the Chinese interbank bond market.
On November 30, the Executive Board of IMF decided to include RMB into the
currency basket of the SDR as a fifth currency along with the U.S. dollar, the euro,
the Japanese yen, and the British pound. The weight of the RMB in the SDR basket is
10.92%. The new basket would become effective on October 1, 2016. On the same day,
the PBC authorized the Zurich branch of CCB to serve as the RMB clearing bank in
Swiss.
On December 7, NAFMII accepted the registration of the Republic of Korea to issue
RMB 3 billion yuan RMB-denominated sovereign bonds on the Chinese Interbank
bond market.
On December 14, the PBC and the Central Bank of United Arab Emirates signed
a bilateral local currency swap agreement of RMB 35 billion yuan/UAE Diram 20
billion. On the same day, the two parties signed the Memorandum of Understanding on
establishing RMB clearing arrangements in UAE. The PBC agreed to expand the pilot
program of RQFII to UAE, with an investment quota of RMB 50 billion yuan.
On December 17, the pilot program of RQFII was expanded to Thailand, with an
investment quota of RMB 50 billion yuan.
2016
On January 20, the General Administration Department of the PBC issued the Notice
on usage of funds on Overseas Institutions’ RMB Bank Settlement Accounts (PBC General
Administration Department Document [2016] No.15).
On January 22, the PBC issued the Notice on Expanding the Pilot Program of Cross-
border Financing Macroprudential Management (PBC Document [2016] No.18).
On February 24, the PBC released an announcement on Issues Regarding Investment in
the interbank Bond Market by Overseas Institutional Investors (PBC Public Announcement
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[2016] No.3).
On March 7, the PBC and the Monetary Authority of Singapore renewed the bilateral
local currency swap agreement of RMB 300 billion yuan/SGD 64 billion, and the
period of validity is 3 years.
On April 29, the PBC issued the Notice on Implementing Nationally the Macroprudential
Management of Cross-border Financing (PBC Document [2016] No.132).
On May 11, the PBC and the Bank AI-Maghrib signed a bilateral local currency swap
agreement of RMB 10 billion yuan/MAD 15 billion.
On June 7, the PBC and the Federal Reserve Board signed the Memorandum of
Understanding on establishing RMB clearing arrangements in the United States. China
declared to grant the U.S. an RQFII investment quota of RMB 250 billion yuan.
On June 17, the PBC and the Central Bank of the Republic of Serbia signed a bilateral
local currency swap agreement of RMB 1.5 billion yuan/RSD 27 billion, and the period
of validity is 3 years.
On June 20, with the authorization of the PBC, the China Foreign Exchange Trade
System (CFETS) announced that it would improve the trading mode between RMB
and South African Rand and launch direct trading between the two currencies on the
interbank foreign-exchange market.
On June 25, the PBC and the Central Bank of the Russian Federation signed the
Memorandum of Understanding on establishing RMB clearing arrangements in the
Russian Federation.
On June 27, with the authorization of the PBC, the China Foreign Exchange Trade
System (CFETS) announced that it would improve the trading mode between RMB
and South-Korean Won and launch direct trading between the two currencies on the
interbank foreign-exchange market.
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On July 11, the Bank of China (Hong Kong) linked to CIPS as a direct participant,
becoming the first overseas direct participant. On the same day, the China Citic Bank,
Bank of Shanghai, China Guangfa Bank, Bank of Jiangsu, Bank of Tokyo-Mitsubishi
UFJ (China), Mizuho Bank (China), Hang Seng Bank (China) linked to CIPS as direct
participants. The number of direct participants of CIPS has increased to 27.
On August 10, the General Administration Department of the PBC issued the Reply
Letter on Issues Concerning the Republic of Poland Issues RMB-denominated Bonds of
RMB on the Interbank Bond Market, approved the Republic of Poland’s application
on issuing RMB-denominated bonds on the inter-bank bond market (PBC General
Administration Department Letter [2016] No.378).
On August 30, the PBC and SAFE issued the Notice on Issues Concerning the Domestic
Security Investment and Management by Renminbi Qualified Foreign Institutional Investors
(PBC Document [2016] No.227).
On September 12, the PBC and the Central Bank of Hungary renewed the bilateral
local currency swap agreement of RMB 10 billion yuan/ HUF 416 billion, and the
period of validity is 3 years.
On September 20, the PBC issued an announcement, which authorized the Bank of
China (New York) Limited to serve as the RMB clearing bank in America (PBC Public
Announcement [2016] No.23).
On September 23, the PBC issued an announcement, which authorized the Industrial
and Commercial Bank of China (Moscow) Limited to serve as the RMB clearing bank
in Russia (PBC Public Announcement [2016] No.24).
On September 26, the PBC authorized the CFETS to conduct direct trading between
RMB and Saudi Riyal in the interbank foreign-exchange market.
On September 26, the PBC authorized the CFETS to conduct direct trading between
RMB and UAE Dirham in the interbank foreign-exchange market.
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On September 27, the PBC and the European Central Bank signed a supplemental
agreement, which extending the validity of bilateral local currency swap agreement
for 3 years to Oct. 8, 2019. The size remains RMB 350 billion yuan/EUR 45 billion.
On November 4, the PBC and CSRC issued the Notice on the Program of the Shanghai,
Shenzhen and Hong Kong Stock Connect Scheme (PBC Document [2016] No.282).
On November 14, with the authorization of the PBC, CFETS announced that it would
improve the trading mode between RMB and Canadian Dollar and launch direct
trading between the two currencies in the interbank foreign-exchange market.
On November 29, the PBC issued the Notice on Further Clarifying Relevant Issues
Concerning the Overseas Renminbi Lending Business of Domestic Enterprises (PBC
Document [2016] No.306).
On December 6, the PBC and the Central Bank of Egypt signed a bilateral local
currency swap agreement of RMB 18 billion yuan/EGP 47 billion, the period of validity
is 3 years.
On December 9, the PBC issued an announcement, which authorized the Agricultural
Bank of China (Dubai) Limited to serve as the RMB clearing bank in United Arab
Emirates (PBC Public Announcement [2016] No.30).
On December 12, the PBC authorized the CFETS to conduct direct trading between
RMB and Mexican Peso in the interbank foreign-exchange market.
On December 12, the PBC authorized the CFETS to conduct direct trading between
RMB and Turkish Lira in the interbank foreign-exchange market.
On December 12, the PBC authorized the CFETS to conduct direct trading between
RMB and Polish Zloty in the interbank foreign-exchange market.
On December 12, the PBC authorized the CFETS to conduct direct trading between
RMB and Danish Krone in the interbank foreign-exchange market.
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On December 12, the PBC authorized the CFETS to conduct direct trading between
RMB and Hungary Forint in the interbank foreign-exchange market.
On December 12, the PBC authorized the CFETS to conduct direct trading between
RMB and Norwegian Krone in the interbank foreign-exchange market.
On December 12, the PBC authorized the CFETS to conduct direct trading between
RMB and Swedish Krone in the interbank foreign-exchange market.
On December 21, the PBC and the Central Bank of Iceland renewed the bilateral local
currency swap agreement of RMB 3.5 billion yuan/ISK 66 billion, and the period of
validity is 3 years.
On December 26, the General Administration Department of the PBC issued the Notice
on Cross-border Renminbi Settlement of Renminbi-denominated Debt Financing Instruments
issued by Overseas Institutions in China (PBC General Administration Department
Document [2016] No.258).
2017
On January 13, the PBC issued the Notice on Issues Concerning the Macroprudential
Management of Overall Cross-Border Financing (PBC Document [2017] No.9).
On March 20, the PBC and Bank of China New York Branch signed the RMB Clearing
Agreement.
On March 20, the PBC and Industrial and Commercial Bank of China (Moscow)
Limited signed the RMB Clearing Agreement.
On March 20, the PBC and Agricultural Bank of China Dubai Branch signed the RMB
Clearing Agreement.
On May 19, the PBC and the Reserve Bank of New Zealand renewed the bilateral local
currency swap agreement of RMB 25 billion yuan/NZD 5 billion, and the period of
2021 RMB INTERNATIONALIZATION REPORT
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validity is 3 years.
On May 23, the PBC issued the Notice on Issuing the Regulation Related on RMB Cross-
border Payment Management Information System (RCPMIS) (PBC Document [2017]
No.126).
On May 27, the General Administration Department of the PBC issued the Notice on
Improving the Interbank Transaction Information Reporting Procedures of the Renminbi
Cross-border Payment Management Information System (PBC General Administration
Department Document [2017] No.118).
On June 29, the PBC and Bank of China (Hong Kong) Limited renewed the RMB
Clearing Agreement.
On July 4, with the approval of the State Council, the quota of Hong Kong SAR of
China’s RQFII will be expanded to RMB 500 billion yuan.
On July 6, the PBC and the Bank of Mongolia renewed the bilateral local currency
swap agreement of RMB 15 billion yuan/MNT 5.4 trillion, and the period of validity is
3 years.
On July 18, the PBC and the Central Bank of Argentina renewed the bilateral local
currency swap agreement of RMB 70 billion/ARS 175 billion, and the period of validity
is 3 years.
On July 21, the PBC and the Swiss National Bank renewed the bilateral local currency
swap agreement of RMB 150 billion yuan/CHF 21 billion, and the period of validity is
3 years.
On August 11, with the authorization of the PBC, the China Foreign Exchange Trade
System (CFETS) may conduct direct trading between RMB and Mongolia MNT in the
interbank foreign-exchange market.
On September 13, with the authorization of the PBC, the China Foreign Exchange
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65
Trade System (CFETS) may conduct direct trading between RMB and Cambodia KHR
in the interbank foreign-exchange market.
On September 21, the PBC and Bank of China Macao branch renewed the RMB
Clearing Agreement.
On October 11, the PBC and the Bank of Korea renewed the bilateral local currency
swap agreement of RMB 360 billion/KRW 64 trillion, and the period of validity is 3
years.
On November 2, the PBC and the Qatar Central Bank renewed the bilateral local
currency swap agreement of RMB 35 billion/QAR 20.8 billion, and the period of
validity is 3 years.
On November 8,the PBC and the Bank of Canada renewed the bilateral local currency
swap agreement of RMB 200 billion/CAD 30 billion, and the period of validity is 3
years.
On November 22, the PBC and the Hong Kong Monetary Authority renewed the
bilateral local currency swap agreement of RMB 400 billion/HKD 470 billion, and the
period of validity is 3 years.
On November 22, the PBC and the Central Bank of Russian Federation renewed the
bilateral local currency swap agreement of RMB 150 billion/RUB 1,325 billion, and the
period of validity is 3 years.
On December 22, the PBC and the Bank of Thailand renewed the bilateral local
currency swap agreement of RMB 70 billion/THB 370 billion, and the period of validity
is 3 years.
2018
On January 4, the PBC and Taipei Branch of Bank of China renewed the RMB clearing
agreement.
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On January 5, the PBC issued the Notice on Further Improving Policies for Cross-border
RMB Business to Facilitate Trade and Investment (PBC Document [2018] No.3), clarifying
that all cross-border business allowed by law to be settled with foreign exchange
could also be settled with RMB by enterprises.
On January 5, CFETS issued the Notice on the Arrangements for Overseas Banks to
Participate in Interbank FX Market Regional Trading, allowing qualified overseas banks
to participate in interbank FX market regional trading.
On February 9, the PBC authorized the J.P. Morgan Chase & Co. to serve as the RMB
clearing bank in USA.
On March 26, the RMB Cross-border Interbank Payment (CIPS) phase II was launched
for pilot operation.
On March 26, the Crude Oil Futures Contract denominated in RMB was listed for
trading on Shanghai International Energy Exchange.
On March 30, the PBC and the Reserve Bank of Australia renewed the bilateral local
currency swap agreement of RMB 200 billion yuan/AUD 40 billion.
On April 3, the PBC and the Central Bank of Albania renewed the bilateral local
currency swap agreement of RMB 2 billion yuan/ALL 34.2 billion.
On April 11, the PBC and the South African Reserve Bank renewed the bilateral local
currency swap agreement of RMB 30 billion yuan/ZAR 54 billion.
On April 20, to further regulate overseas security investment by RMB qualified
domestic institutional investors, the General Administration Department of the PBC
issued the Notice on Further Clarifying the Rules on Overseas Security Investment by RMB
Qualified Domestic Institutional Investors (PBC General Administration Department
Document [2018] No.81).
On April 27, the PBC and the Central Bank of Nigeria signed a bilateral local currency
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swap agreement of RMB 15 billion yuan/NGN 720 billion.
On May 1, the daily quotas under both Shanghai-Hong Kong Stock Connect and
Shenzhen-Hong Kong Stock Connect were expanded four times, in which the daily
quota for each of the northbound trading links were adjusted to RMB 52 billion yuan
from RMB 13 billion yuan, the daily quota for each of the southbound trading links
were adjusted to RMB 42 billion yuan from RMB 10.5 billion yuan.
On May 2, CIPS phase II was fully launched, with eligible direct participants engaged
online simultaneously.
On May 4, the foreign investors were formally introduced into domestic RMB-
denominated iron ore futures trading in Dalian Commodity Exchange.
On May 9, the pilot area of RMB qualified foreign institutional investors expanded to
Japan, with a quota of RMB 200 billion yuan.
On May 10, the PBC and the National Bank of the Republic of Belarus renewed the
bilateral local currency swap agreement of RMB 7 billion yuan/BYR 2.22 billion.
On May 16, in order to further improve cross-border capital flow, and advance the
opening-up of China’s financial market, the General Administration Department of
the PBC issued the Notice on Further Perfecting the Management of Cross-border Capital
Flow to Support the Opening-up in Financial Market (PBC General Administration
Department Document [2018] No.96).
On May 23, the PBC and the State Bank of Pakistan renewed the bilateral local
currency swap agreement of RMB 20 billion yuan/PKR 351 billion.
On May 25, the PBC and the Central Bank of Chile renewed the bilateral local
currency swap agreement of RMB 22 billion yuan/CLP 2,200 billion.
On May 28, the PBC and the National Bank of Kazakhstan renewed the bilateral local
currency swap agreement of RMB 7 billion yuan/KZT 350 billion.
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On June 1, the Chinese A-share was formally included in MSCI Emerging Markets
Index and Global Standard Index, which was conductive to attracting overseas
investors to allocate assets on RMB share.
On June 11, in order to regulate the investment in domestic security market by RMB
qualified foreign institutional investors, the PBC and SAFE jointly issued the Notice on
the Rules of Domestic Security Investment by RMB Qualified Foreign Institutional Investors
(PBC Document [2018] No.157).
On June 13, to perfect the management of RMB purchases and sales businesses,
the PBC issued the Notice on Improving the Management of RMB Purchases and Sales
Businesses (PBC Document [2018] No.159), expanding the scope of purchases and sales
businesses to securities investment.
On August 20, the PBC and the Bank Negara Malaysia renewed the bilateral local
currency swap agreement of RMB 180 billion yuan/MYR 110 billion.
On September 3, CFETS formally introduced the Industrial and Commercial Bank of
China (Almaty) and ICBC Standard Bank Plc. to participate in domestic interbank FX
market for the regional trading of RMB against KZT, and extended trading hour for RMB
against KZT regional trading from 10:30-16:30 to 10:30-19:00 (Beijing time, GMT+8).
On September 8, in order to promote the opening up of domestic interbank bond
market, regulate foreign institutional bond issuance, and protect legitimate interests
of bond market investors, the PBC and MOF jointly issued the Interim Rules for the
Administration of Bond Issuances by Overseas Institutions on China’s Interbank Bond Market
(PBC, MOF Public Announcement [2018] No.16).
On September 20, the PBC and Hong Kong Monetary Authority signed the
Memorandum of Cooperation on The Issuance of PBC Bills through the Central Money
Markets Unit.
On October 13, the PBC and the Bank of England renewed the bilateral local currency
swap agreement of RMB 350 billion yuan/GBP 40 billion.
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On October 22, the PBC and the Bank of Japan signed the memorandum of
understanding on the currency clearing cooperation across Japan. On October 26, the
PBC authorized Tokyo Branch of Bank of China to serve as the RMB clearing bank in
Japan.
On October 26, the PBC and the Bank of Japan signed a bilateral local currency swap
agreement of RMB 200 billion yuan/JPY 3,400 billion.
On November 7, the PBC issued RMB central bank bills by tender through bond
bidding platform of the Hong Kong Monetary Authority’s Central Money Markets
Unit (CMU) for the first time.
On November 16, the PBC and Bank Indonesia renewed bilateral local currency swap
agreement of RMB 200 billion yuan/IDR 440 trillion.
On November 20, the PBC and the Central Bank of Philippine signed the
memorandum of understanding on the currency clearing cooperation across the
Philippines.
On November 30, Pure Terephthalic Acid (PTA) futures which denominated in RMB
were formally introduced to overseas traders.
On December 10, the PBC and the National Bank of Ukraine renewed the bilateral
local currency swap agreement of RMB 15 billion yuan/UAH 62 billion.
2019
On January 31, Bloomberg formally confirmed that Chinese bonds would be added to
the Bloomberg Barclays Global Aggregate Index starting from April 2019.
On February 11, the PBC and the Centrale Bank van Suriname renewed the bilateral
local currency swap agreement of RMB 1 billion yuan/ SRD 1.1 billion.
On February 28, the MSCI announced that it would significantly increase the weight
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of Chinese A-shares in the MSCI Indexes by raising the inclusion factor from 5% to
20% in three steps.
On May 10, the PBC and the Monetary Authority of Singapore renewed the bilateral
local currency swap agreement of RMB 300 billion yuan/ SGD 61 billion.
On May 30, the PBC and the Central Bank of the Republic of Turkey renewed the
bilateral local currency swap agreement of RMB 12 billion yuan/TRY 10.9 billion.
On May 30, the PBC issued an announcement, designating the MUFG Bank to serve
as the RMB clearing bank in Japan. (PBC Public Announcement [2019] No.11)
On June 5, the pilot area of the RMB Qualified Foreign Institutional Investors (RQFII)
expanded to the Netherlands, with a quota of RMB 50 billion yuan.
On August 23, the PBC released the 2019 RMB Internationalization Report.
On August 27, a symposium on the use of the RMB in neighboring countries and
regions in 2019 was held in Harbin to study and deploy tasks related to further
deepening and expanding the RMB cross-border use in neighboring countries and
regions.
On September 10, the SAFE announced to remove limitations on investment quotas
of the QFII and RQFII.
On September 12, the PBC issued an announcement, designating the Manila Branch
of Bank of China to serve as the RMB clearing bank in Philippines (PBC Public
Announcement [2019] No.18).
On October 8, the PBC and the European Central Bank renewed the bilateral local
currency swap agreement of RMB 350 billion yuan/ EUR 45 billion.
On October 15, the PBC and SAFE jointly issued the Notice on the Issues Regarding
Further Facilitating Investment in the Interbank Bond Market by Foreign Institutional
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Investors (PBC Document [2019] No.240).
On December 5, the PBC and the Monetary Authority of Macao SAR of China signed
a bilateral local currency swap agreement of RMB 30 billion yuan/MOP 35 billion.
On December 10, the PBC and the Central Bank of Hungary renewed the bilateral
local currency swap agreement of RMB 20 billion yuan/ HUF 864 billion.
On December 18, the PBC issued an announcement to further facilitate individual
RMB cross-border remittances in Macao SAR of China (PBC Public Announcement
[2019] No.29).
On December 20, the PBC held a symposium on the RMB internationalization.
On December 21, the professional committee on the cross-border RMB business of
China Society for Finance and Banking was established.
2020
On January 6, the PBC and the Bank of the Lao P.D.R signed a bilateral local currency
cooperation agreement, allowing the direct use of local currency for settlement under
all the opened current and capital accounts in both countries.
On January 31, the PBC, MOF, CBIRC, CSRC and SAFE jointly issued the Notice on
Further Strengthening Financial Support for Prevention and Control of the Novel Coronavirus
Pneumonia(NCP) Epidemic (PBC Document [2020] No.29), to simplify the procedures
for the cross-border RMB business related to prevention and control of the epidemic,
support the establishment of a “Green Channel” and effectively improve the efficiency
of the cross-border RMB business.
On February 10, the PBC and the Central Bank of Egypt renewed the bilateral local
currency swap agreement of RMB 18 billion yuan/EGP 41 billion.
On March 11, the PBC and SAFE issued the Notice on Adjusting the Macroprudential
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Adjustment Parameter of Overall Cross-Border Financing (PBC Document [2020] No.64),
raising the macroprudential adjustment coefficient of the overall cross-border
financing from 1 to 1.25.
On May 7, the PBC and SAFE jointly issued the Regulations on Funds of Securities and
Futures Investment by Foreign Institutional Investors (PBC, SAFE Public Announcement
[2020] No.2).
On May 20, the PBC and the Bank of the Lao P.D.R signed a bilateral local currency
swap agreement of RMB 6 billion yuan/LAK 7.6 trillion.
On July 31, the PBC and the National Bank of Pakistan signed a revised bilateral local
currency swap agreement to expand the swap scale to RMB 30 billion yuan/PKR 720
billion.
On July 31, the PBC and the Central Bank of Chile signed a revised bilateral local
currency swap agreement to expand the swap scale to RMB 50 billion yuan/CLP 5.6
trillion.
On July 31, the PBC and the Bank of Mongolia renewed the bilateral local currency
swap agreement of RMB 15 billion yuan/MNT 6 trillion.
On August 6, the PBC and the Central Bank of Argentina renewed the bilateral local
currency swap agreement of RMB 70 billion yuan/ARS 730 billion, and signed a
supplementary bilateral local currency swap agreement of RMB 60 billion yuan.
On August 22, the PBC and the Reserve Bank of New Zealand renewed the bilateral
local currency swap agreement of RMB 25 billion yuan (NZD swap scale is calculated
at the spot exchange rate).
On September 17, the PBC and the Central Bank of Hungary signed a supplementary
bilateral local currency swap agreement of RMB 40 billion yuan.
On September 25, the CSRC, PBC and SAFE jointly released the Measures for the
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Administration of Domestic Securities and Futures Investment by Qualified Foreign
Institutional Investors and RMB Qualified Foreign Institutional Investors (CSRC, PBC, and
SAFE Decree No.176).
On September 30, the PBC and the Bank of Indonesia signed the Memorandum of
Understanding on the Establishment of a Cooperative Framework for Facilitating Local
Currency Settlement of Current Account Transactions and Direct Investment.
On October 11, the PBC and the Bank of Korea signed a bilateral local currency swap
extension and revision agreement to expand the swap scale to RMB 400 billion yuan/
KRW 70 trillion.
On October 19, the PBC and the Central Bank of Iceland renewed the bilateral local
currency swap agreement of RMB 3.5 billion yuan/ISK 70 billion.
On November 23, the PBC and the Central Bank of Russian Federation renewed a
bilateral local currency swap agreement of RMB 150 billion yuan/RUB 1.75 trillion.
On November 23, the PBC and Hong Kong Monetary Authority signed a revised
bilateral local currency swap agreement to expand the swap scale to RMB 500 billion
yuan/HKD 590 billion.
On December 11, the PBC and SAFE adjusted the macroprudential adjustment
parameter for cross-border financing, lowering the macroprudential adjustment
parameter for financial institutions from 1.25 to 1.
On December 22, the PBC and Bank of Thailand renewed the bilateral local currency
swap agreement of RMB 70 billion yuan/THB 370 billion.
2021
On January 4, the PBC, NDRC, MOFCOM, SASAC, CBIRC and SAFE jointly issued
the Notice on Further Optimizing the Cross-border RMB Policies to Support Stable Foreign
Trade and Investment (PBC Document [2020] No.330).
2021 RMB INTERNATIONALIZATION REPORT
74
On January 5, the PBC and SAFE issued the Notice on Adjusting the Macroprudential
Adjustment Coefficient of Overseas Renminbi Lending Business of Domestic Enterprises (PBC
Document [2021] No.2), which adjusted the macroprudential adjustment coefficient of
overseas Renminbi lending business of domestic enterprises from 0.3 to 0.5.
On January 6, the PBC and the Central Bank of Qatar renewed the bilateral local
currency swap agreement of RMB 35 billion yuan/QAR 20.8 billion.
On January 7, the PBC and the Bank of Canada renewed the bilateral local currency
swap agreement of RMB 200 billion yuan (the swap amount of CAD was calculated at
the spot exchange rate).
On January 7, the PBC and SAFE issued the Notice on Adjusting the Macroprudential
Adjustment Parameter of Cross-Border Financing of Enterprises (PBC Document [2021]
No.5), lowering the macroprudential adjustment parameter of cross-border financing
of enterprises from 1.25 to 1.
On January 27, the Bank of China (Hong Kong) Ltd. launched the market making
mechanism for central-bank bills repurchase in Hong Kong SAR of China.
On March 1, the PBC and the Central Bank of Cambodia signed a bilateral local
currency cooperation agreement, extending the local currency settlement to all opened
current and capital accounts in both countries.
On March 19, the PBC and the Central Bank of Sri Lanka renewed the bilateral local
currency swap agreement of RMB 10 billion yuan/LKR 300 billion.
On June 2, the PBC and the Central Bank of the Republic of Turkey signed a bilateral
currency swap revision agreement to expand the swap scale to RMB 35 billion yuan/
TRY 46 billion.
On June 9, the PBC and the Central Bank of Nigeria renewed a bilateral local currency
swap agreement of RMB 15 billion yuan/NGN 967 billion.
PART SIX
Highlights of RMB Internationalization
75
On July 6, the PBC and the Reserve Bank of Australia renewed the bilateral local
currency swap agreement of RMB 200 billion yuan/AUD 41 billion.
On July 12, the PBC and the Bank Negara Malaysia renewed the bilateral local
currency swap agreement of RMB 180 billion yuan/MYR 110 billion.
On July 13, the PBC and the State Bank of Pakistan renewed the bilateral local
currency swap agreement of RMB 30 billion yuan/PKR 730 billion.
On August 20, the PBC and the Central Bank of Chile renewed the bilateral local
currency swap agreement of RMB 50 billion yuan/CLP 6 trillion.
On September 6, the PBC and the Bank of Indonesia formally launched cooperation
framework for Local Currency Settlement (LCS).
On September 10, Guangdong
，
Hong Kong and Macao simultaneously promulgated
the Implementation Arrangements for the Cross-boundary Wealth Management Connect Pilot
Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area.
2021 RMB INTERNATIONALIZATION REPORT
76
Afterword
T
o better observe and analyze the trend of the international use
of the RMB, from the year of 2015, the Macroprudential Policy
Bureau (formerly the Monetary Policy Department
Ⅱ
) of the PBC has
organized staff to write and publish the annual reports on the RMB
internationalization in both Chinese and English for the reference of
market participants and researchers home and abroad. The report
covers a wide range involved in the performance of the international
use of the RMB from all aspects, relevant policies and reform
progress, the status of the global major offshore RMB markets, the
prospect and other main contents, which contains detailed database
and elaborated columns on key issues.
The Macroprudential Policy Bureau wrote and translated the 2021
RMB Internationalization Report together with the Monetary Policy
Department, the Payment System Department, the Currency Gold
and Silver Bureau, as well as the Cross-border RMB Offices from
Tianjin Branch, Nanjing Branch, Wuhan Branch, Chengdu Branch,
Xi’an Branch, Chongqing Operations Office and Changsha Central
Sub-branch within PBC. During this period, we have received great
support from the Bank of China, Cross-border Interbank Payment and
Clearing Co. Ltd., Shanghai Futures Exchange and China Financial
Publishing House. Hereby, we sincerely extend our gratitude for all
that have supported our work.
Due to our limited knowledge, there may inevitably be some
inappropriateness in the report. We earnestly invite any readers to
comment and correct.
The Editor
September 2021
