Yuan Payments Sent from Europe to China Increased by 105% YoY with New RMB Clearing Banks

The Chinese central bank continues to push for the internationalization of the Yuan as a trade facilitator for its export driven economy and European firms are quick to adopt to payments in the Chinese currency.

SWIFTThe Society for Worldwide Interbank Financial Telecommunication (SWIFT) announced today that Europe now represents 10% of the payments worldwide by value in yuan (RMB or Renminbi as the Chinese currency is also called). In addition, European payments directly exchanged with China in RMB have increased by 105%, showing a considerable upwards trend in yuan usage on the continent following the recent addition of clearing banks in some of the E.U’s financial hubs.

According to Swift’s Monthly RMB Tracker report, during the past year, four European countries have been settling into the top ten foreign yuan payment markets. In the UK over the last 12 months, payments made in the Chinese currency increased by more than 120%. France, Germany and Luxembourg have also seen rapid yuan adoption, as in the three countries renminbi payments increased respectively by 43.5%, 116% and 41.9%. The yuan strengthened its position as the seventh most used global payments currency and accounted for 1.57% of global payments.

“The fact that Renminbi payments between Europe and Greater China have more than doubled in a year is extremely encouraging news for European businesses and governments,” said Vina Cheung, Global Head of RMB Internationalisation, Payments and Cash Management, HSBC,. “It shows businesses are seizing the opportunity presented by China’s currency liberalisation programme to deepen their commercial relationships in the world’s second largest economy. It also shows government efforts to build hubs for RMB trading and investment in Europe are starting to bear fruit,” Cheung added.

For most of these European hubs, Greater China (including Hong Kong) still remains the main trading partner in RMB. However, there seems to be a noticeable shift in business for some countries like Luxembourg, with an increasing share of offshore flows, meaning outside the Greater China area. Michael Moon, Director, Payments Markets, Asia Pacific at SWIFT, commented: “Over the past year, Chinese authorities and financial institutions announced new partnerships with European countries, making them official clearing centres for the renminbi. In the future, we should see a bigger contribution from truly offshore flows in the internationalization of the Chinese currency.”

In July, a bilateral currency swap agreement between the People’s Bank of China and Swiss National Bank is also putting Switzerland in line to becoming a new RMB hub in Europe. The Chinese central bank continues to push for the internationalization of the yuan as a trade facilitator for its export driven economy. Last month, South Korea was approved for a yuan clearing bank and the currency quickly gained popularity. Also recently, the Bank of China’s Hong Kong subsidiary (BOCHK), the official clearing bank of the yuan in Hong Kong, announced it is set to extend its yuan clearing service hours to cover the London trading session so that it will be better equipped to compete and cooperate with global banks.

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1 Comments on this post


  1. Jon said:

    is there other ways to wire funds internationally besides SWIFT and western union?

    August 27th, 2014 at 3:15 am

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