Renminbi internationalization gets a stronger political mandate

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After nearly a decade of limited progress, RMB internationalisation appears to have re-accelerated since 2024. The context appears highly supportive of continued progress: the renminbi has been appreciating since last summer as China’s balance of payments has been persistently strong, and the renminbi might benefit at the margin as historical US allies are reconsidering their USD allocations. Moreover, the renminbi has already displaced the dollar as the dominant currency for Chinese trade credit in the span of a few years, as we have discussed in a previous note on this topic (see link and below chart).In this note, we zoom in on three policy milestones in renminbi internationalisation since 2024. The official messaging points to a higher priority and has also become somewhat more specific. In a future note, we will discuss how onshore commentators conceptualise RMB internationalisation by reviewing 43 Chinese-language articles published since 2024.RMB internationalisation was a notable policy priority for Chinese authorities in the early 2010s, though the project slowed down from the mid-2010s amid capital outflow pressures. The theme has reemerged as a policy priority in China in recent years, particularly since 2024.Renminbi internationalisation as a policy goal has grown in importance in the past few years, and thinking on the topic is becoming more concrete. Xi Jinping has begun to comment on the issue, and this is a strong signal and means that there is political backing for the project at the highest levels. The strong backing is also evident in the latest five-year…