China’s campaign to internationalise the renminbi (RMB) is gathering pace, with overseas RMB-denominated lending and investments now exceeding RMB3.4 trillion ($480 billion) — a fourfold increase over the last five years. This financial expansion signals a profound strategic shift as Beijing aims to reduce its dependency on the US dollar and reshape global monetary flows into a more multipolar system.
Structural Shift: RMB as a Credit and Trade Instrument
According to recent data from China’s State Administration of Foreign Exchange, external fixed-income assets held by Chinese banks more than doubled in the past decade, reaching $1.5 trillion. Notably, RMB-denominated assets now comprise nearly $484 billion of this total. Loans and deposits alone have surged from $110 billion in 2020 to $360 billion by mid-2025.
The Bank for International Settlements (BIS) reinforces this trajectory, reporting that RMB overseas lending to developing nations rose by $373 billion in just four years, with 2022 marking a decisive turn away from dollar and euro-denominated credit.
The Geopolitical Catalyst
This trend is not purely economic. US and EU sanctions, including recent European measures against Chinese banks for aiding Russia, have heightened Beijing’s urgency to de-risk from the dollar-based system. By promoting RMB settlements, China ensures it retains trade autonomy in geopolitically tense scenarios.
“From China’s perspective, [settlement in renminbi] is important because it shows that no matter what happens, it can still trade,” noted Adam Wolfe of Absolute Strategy Research.
RMB’s Rise in Trade Finance
The currency’s prominence in global trade finance is also growing. Data from SWIFT reveals the RMB’s share in this space has quadrupled to 7.6% over three years, making it the second most-used currency in trade finance globally — just behind the US dollar.
Much of this growth is linked to strategic lending and infrastructure investments. Countries like Kenya, Angola, and Ethiopia have restructured old dollar debts into RMB. Simultaneously, sovereign bond issuers such as Indonesia, Slovenia, and Kazakhstan are embracing RMB-denominated debt. In August, Kazakhstan’s development bank issued a RMB2 billion offshore bond at a 3.3% yield.
Infrastructure and Payment Systems: A New Ecosystem
China has methodically constructed an offshore RMB infrastructure to support its monetary ambitions:
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Offshore RMB clearing banks now span multiple continents
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A network of currency swap lines supports bilateral trade
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The CIPS (Cross-Border Interbank Payment System) now processes over RMB40 trillion per quarter, reflecting a clear shift away from SWIFT and into Chinese-controlled channels
These systems ensure that even as RMB use on SWIFT declines, RMB transactions continue to rise — indicating a parallel payment infrastructure is firmly in place.
Hong Kong as a Strategic Financial Gateway
Efforts to enhance RMB liquidity and accessibility have centred on Hong Kong. The city is evolving into a renminbi bond and currency trading hub, supported by new initiatives:
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Bond Connect expansions now link mainland investors with Hong Kong markets
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Repo markets in RMB are now open to foreign investors, allowing them to use RMB assets as collateral
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A new regulatory “road map” is boosting fixed-income issuance and liquidity
As Paul Smith of Citi remarked, the momentum behind these programmes mirrors earlier capital market reforms like Stock Connect, and will “accelerate the renminbi as a funding currency”.
The Outlook: No Reserve Currency Ambition, Just Leverage
Despite this expansion, analysts agree that Beijing has no ambition to dethrone the US dollar. Instead, the objective is greater autonomy, flexibility, and strategic insulation. As Bert Hofman of the National University of Singapore explains, all the critical pieces for rapid internationalisation are now “falling into place”.
China’s capital controls and the relatively small share of RMB in official reserves (just 2.1% as of early 2025) remain key obstacles. But with infrastructure reforms, new financial instruments, and a targeted global lending strategy, China is positioning the renminbi as a credible alternative in a more fragmented, multipolar financial world.