More countries ＂go to dollarization＂! The RMB surpassed the US dollar for the first time in this transaction.

　　BEIJING, April 29 (Zhongxin Finance Gong Hongyu) China’s cross-border transactions "de-dollarization" set a new record!

　　According to the data recently released by the State Administration of Foreign Exchange of China, the proportion of RMB in foreign-related receipts and payments of China banks rose from nearly zero in 2010 to a record 48% at the end of March this year, a record high in 13 years. During the same period, the share of the US dollar dropped from 83% to 47%.

　　"The use of RMB in cross-border transactions in China surpassed that of the US dollar for the first time, which is another milestone in the process of reducing China’s dependence on the US dollar." Bloomberg reported this.

　　The international "circle of friends" of RMB is growing.

　　Since 2010, the US dollar has consistently ranked first in the currency proportion of cross-border receipts and payments in China. However, with the wave of "dollarization" in many countries around the world and China actively promoting the settlement of bilateral trade in RMB, reducing the use of US dollars is becoming a new phenomenon in cross-border transactions in China.

　　Since March this year, many countries have successively turned to RMB settlement. On April 26th, Argentine Economy Minister Felipe Massa announced that Argentina would stop using US dollars to pay for goods imported from China and use RMB instead. In early April, Malaysian Prime Minister Anwar said that Malaysia’s central bank had started discussions with China so that the trade between the two countries could be settled in ringgit and RMB.

　　Earlier, on March 29th, the Brazilian government indicated that Brazil and China had reached an agreement to trade in local currency instead of using the US dollar as an intermediate currency. On March 28th, CNOOC China and Total Energy, a French company, completed the first domestic purchase transaction of imported liquefied natural gas (LNG) settled in RMB through the platform of Shanghai Oil and Gas Trading Center.

　　In fact, up to now, more than 30 countries, including Indonesia, Iran, Russia and Germany, have gradually turned to RMB for trade settlement or investment. The circle of international friends of RMB is growing, and the recognition of RMB in the world, especially in emerging economies, has greatly increased.

　　Why is the RMB "hot"?

　　"The increase in the use of the renminbi is a natural result of China’s opening of its capital account, and bonds flowing into the mainland of China and out of Hong Kong are increasing." Zhao Zhixuan, chief Asia foreign exchange and interest rate strategist of Bloomberg Industry Research, wrote in a briefing.

　　Liang Zhaoji, an economist at DBS Bank, told Bloomberg that the internationalization of RMB is accelerating as other countries seek an alternative payment currency to spread risks and the credibility of the Federal Reserve is not as good as before.

　　At present, many countries around the world have set off a wave of "dollarization". Chen Wenling, chief economist of China Center for International Economic Exchanges, told the media that the "de-dollarization" is behind the distrust of the United States and the dollar. This is not only because of their doubts about American credit and dissatisfaction with the hegemony of the US dollar, but also because of their helplessness and risk aversion. Now the dollar has become the main source of instability and uncertainty in the world economy.

　　"In the Ukrainian crisis, the United States joined forces with many countries to sanction Russia, which affected Russia’s export trade. Countries around the world saw the hegemonic behavior of the US dollar. ‘ De-dollarization ’ Currency diversification is the general trend. " Yang Delong, chief economist and fund manager of Qianhai Open Source Fund, previously told Zhongxin Finance.

　　What is the significance of exceeding the US dollar in cross-border transactions?

　　"The use of RMB in foreign-related collection and payment by banks exceeds that of US dollars, indicating that cross-border transactions in China have gradually become dominated by local currency." Wang Youxin, a senior researcher at China Bank Research Institute, mentioned.

　　Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, said at the press conference on April 21 that the increasing proportion of RMB in cross-border use will help reduce the risk of currency mismatch in cross-border transactions.

　　"In the past, pricing and settlement in China’s foreign trade mainly used third-party currencies, which not only increased the foreign currency risk exposure and exchange rate risk of enterprises, but also increased the difficulty of the management and operation of national foreign exchange reserves and increased the risk of cross-border capital flow fluctuations." Wang Youxin said.

　　In Wang Youxin’s view, after the gradual promotion of local currency settlement, the exchange risk of enterprises will be significantly reduced, and the risk of currency mismatch between assets and liabilities in production and operation will be significantly reduced, so enterprises can invest more resources and energy in their main business. The volatility of cross-border foreign currency flows will be reduced, the demand for RMB liquidity and asset allocation will increase, the stability of exchange rate will be improved, and RMB assets will be favored by more international investors.

　　In addition, Wang Youxin mentioned that the increased use of RMB in bilateral trade will play a leading role for other economies and market participants, and RMB cross-border settlement will be promoted in more scenarios and more countries in the future.

　　In April, the State Council, China issued the Opinions on Promoting Stable Scale and Excellent Structure of Foreign Trade, which mentioned that financial institutions should be encouraged to innovate and improve foreign exchange derivatives and cross-border RMB business, and further expand the scale of RMB settlement of cross-border trade.

　　Yang Delong believes that the further internationalization of RMB will change the state of "one currency dominating" the US dollar to a certain extent, weaken the power of the United States to manipulate the global money market, and benefit the development of non-American parents. (End)