In a strategic move to leverage the ongoing U.S. tariff turbulence, Chinese President Xi Jinping has embarked on a mission to cement ties with Southeast Asia and bolster the global usage of the yuan. The People’s Bank of China is capitalizing on the confusion in global trade to promote the yuan as a viable cross-border currency.
Despite current limitations, including China’s reluctance to fully open its capital account, yuan transactions have reached unprecedented levels. Although dethroning the dollar remains out of reach, the recent uptick in cross-border payments signifies a growing international appetite for yuan utilization amid declining trust in U.S. currency and assets.
As China forges deeper trade connections, especially with emerging markets, the prospect of an independent financial architecture gains traction. Analysts predict that as the U.S.-oriented global monetary system faces challenges, China’s proactive stance presents a crucial opportunity to enhance the yuan’s status on the world stage.
(With inputs from agencies.)
