People’s Bank of China (PBOC) Deputy Governor Tao Ling said on October 16 at the Global Wealth Management Forum – 2026 Shanghai Suhewan Conference that the RMB has yet to form a smooth international circulation—from being obtainable to being convenient to use to being held long-term. The PBOC will further optimize its measures to build an integrated chain of receiving RMB, using RMB, investing in RMB, and hedging RMB risks.
In her keynote speech, she disclosed the latest progress in RMB internationalization: on an all-inclusive basis, the RMB is now the world’s third-largest payment currency; it ranks fifth in global foreign exchange trading and is the fastest-growing among major currencies; and over the past five years, the RMB has consistently ranked among the top three in global trade finance, with its share rising from around 2% to approximately 7%.
Tao Ling noted that the RMB becoming an international currency will provide a reliable new option for global trade and investment and financing activities. China’s political, economic, and social stability over the long term, its position as the world’s second-largest economy, its status as a major trading partner for more than 160 countries and regions, and the basic stability of the RMB exchange rate at a reasonably balanced level have all created favorable conditions for RMB internationalization.
Latest Data on International Use of the RMB
In the payments arena, a multi-channel, wide-coverage RMB cross-border payment and clearing network is taking shape. The Cross-Border Interbank Payment System (CIPS), domestic and overseas fast payment systems, and QR code interoperability are all advancing steadily, while the digital RMB has also made positive progress.
In investment and financing, the willingness of overseas entities to raise RMB financing has clearly increased. Overseas entities can invest in onshore RMB assets through Bond Connect, Stock Connect, and qualified investor access mechanisms. RMB government bonds and central bank bills are now issued on a regular basis offshore, with outstanding dim sum bonds and panda bonds currently exceeding 2 trillion yuan (approximately $299 billion).
In foreign exchange trading, the range of participants in China’s onshore interbank FX market continues to expand, with overseas central banks and monetary authorities, international financial organizations, sovereign wealth funds, and RMB clearing banks all eligible to participate.
In reserve currency terms, according to data released by the International Monetary Fund, as of the end of Q2 2026, both the scale and share of RMB foreign exchange reserves had risen, ranking seventh among major reserve currencies. The RMB’s weight in the Special Drawing Rights (SDR) currency basket stands at 12.28%, behind only the US dollar and the euro.
As of the end of June 2026, a total of 1,200 overseas institutions had entered China’s onshore interbank bond market, with overseas entities holding 3.2 trillion yuan (approximately $479 billion) in onshore bonds. The scale of RMB government bonds in the offshore market is also growing, and their application scenarios as eligible collateral continue to expand.
Three Major Measures to Build an Integrated Chain
In her speech, Tao Ling elaborated on three key policy measures to smooth the international circulation of the RMB.
The first measure is to provide RMB liquidity to the offshore market. She said that whether the offshore market has sufficient RMB is a prerequisite for overseas entities to obtain and use the currency. There are three main channels for supplying RMB liquidity: trade, direct investment, and financing. Since 2022, the PBOC, together with relevant departments, has improved a multi-tiered offshore RMB liquidity supply mechanism.
Going forward, the PBOC will continue to support financial institutions in conducting RMB overseas lending and cross-border trade finance, improve interbank cross-border RMB financing policies, encourage more overseas institutions to participate in the issuance and trading of panda bonds, and support Hong Kong in developing its RMB dim sum bond market. Building on the already-launched offshore RMB bond repo and cross-border repo businesses, the PBOC will continue to promote product innovation and mechanism improvement in the repo and derivatives markets. At the same time, it will support clearing banks in better fulfilling their role as liquidity providers in the offshore market, leverage currency swap mechanisms, and establish normalized swap fund usage arrangements with more eligible countries and regions.
The second measure is to broaden channels for RMB asset allocation. Tao Ling pointed out that once overseas entities obtain RMB liquidity, the question becomes how to move from being willing to hold it to actually holding onto it—rather than treating the RMB merely as a payment instrument and quickly converting it into other currencies after transactions. This requires investable RMB assets and market hedging tools that allow RMB funds to settle and stay.
To this end, the PBOC will support more types of overseas investors in participating in China’s financial markets through appropriate means, investing in Chinese onshore stocks, equity, bonds, gold derivatives, and commodity futures. It will develop the RMB and foreign exchange markets, enrich trading products, and advance FX derivatives trading. It will increase the supply of RMB assets in the offshore market and promote RMB bonds as globally recognized eligible collateral. It will also strengthen the interconnection of domestic and overseas financial market trading platforms and financial infrastructure.
The third measure is to raise the level of capital account liberalization. Tao Ling particularly emphasized that capital account liberalization and capital account convertibility are not entirely the same thing. If a transaction uses only RMB, it does not involve currency conversion—only the cross-border movement of currency. Therefore, measuring the level of capital account liberalization requires considering not only currency convertibility but also the cross-border movement of currency. It requires considering not only foreign currencies but also the domestic currency. If currency conversion is restricted and cross-border movement is restricted, the willingness of various entities to obtain and hold RMB may diminish.
She said the PBOC will follow the requirements of the 15th Five-Year Plan and, together with the State Administration of Foreign Exchange (SAFE) and other relevant departments, steadily enhance the convenience of cross-border fund conversion and cross-border fund movement, improve financial market opening channels, integrate and optimize institutional rules, support the development of the Shanghai International Financial Center, and consolidate and elevate the status of the Hong Kong International Financial Center.
The Diversification Trend of the International Monetary System
In her speech, Tao Ling reviewed the evolution of the international monetary system. She said that over hundreds of years, the international monetary system has been in constant evolution, and the dominant international currency has the attributes of a global public good. Changes in the dominant international currency reflect profound shifts in the global landscape. After World War II, an international monetary system centered on the US dollar, supplemented by other currencies, was formed.
She believes the current international monetary system is undergoing changes and may develop a more diversified configuration in the future. This will help push sovereign currency-issuing countries to strengthen policy discipline and enhance the resilience of the international monetary system.
On risk prevention, Tao Ling said that in advancing capital account liberalization, China will adhere to coordinating development and security, improve macroprudential management of cross-border capital flows, strengthen the risk prevention system commensurate with capital account liberalization, and foster a stable and sound monetary and financial environment.
She concluded by saying that advancing RMB internationalization is a task of great historical significance and contemporary value that must be pursued actively, prudently, step by step, and with sustained effort. She expressed hope for continued communication and cooperation with all parties to expand the high-level opening-up of China’s financial sector and inject new positive energy into global economic and financial stability.
