The RMB, as my country’s official currency, has continued to rise on the international stage in recent years, and its role as an international settlement currency has also received increasing attention and recognition. At present, many countries and regions have begun to accept or actively consider using RMB for trade and investment settlement. This not only reflects the significant progress of RMB internationalization, but also injects new vitality into the diversified development of the global trading system.
From the close cooperation between neighboring countries and regions, to the deep ties established by Gulf countries with China due to commodity trade, to the active adoption of important trading partners such as Russia and Germany, and even emerging markets and developing countries seeking diversified currency settlements, On the road to internationalization, the scope of application of RMB settlement is gradually expanding, and its advantages are becoming increasingly apparent.
Countries that mainly support RMB settlement
When discussing the classification of countries that mainly support RMB settlement, we can conduct a detailed analysis from the following aspects:
1. Neighboring countries and regions
List of countries: North Korea, Mongolia, Pakistan, Vietnam, Laos, Myanmar, Nepal, etc.
• Geographical proximity: These countries are geographically adjacent to China, which facilitates economic and trade exchanges and currency circulation.
• Frequent economic and trade exchanges: Long-term trade cooperation prompted these countries to start using RMB for settlement earlier to meet the needs of trade facilitation.
• Promotion of regionalization and internationalization: With the widespread use of RMB in these countries, it not only enhances the circulation of RMB in surrounding areas, but also lays a solid foundation for the process of regionalization and internationalization of RMB.
2. Gulf countries
Listed countries: Iran, Saudi Arabia, etc.
• Close commodity trade: These countries mainly export commodities such as oil and have deep trade ties with China.
• Change in settlement currency: As China’s position in the global energy market increases, Gulf countries gradually accept the renminbi as the settlement currency to reduce their dependence on the U.S. dollar.
• Penetration of the financial market in the Middle East: The use of RMB settlement will help the penetration of the RMB into the financial market in the Middle East and enhance the international status of the RMB.
3. Important trading partners
List of countries: Russia, Germany, United Kingdom, etc.
• Trade needs and economic considerations: These countries have a large amount of trade with China, and using RMB for settlement can reduce costs and improve efficiency.
• Specific cooperation cases: Take Sino-Russian trade as an example. The two countries have extensive cooperation in energy, infrastructure and other fields, and the use of RMB for settlement has become the norm. This not only promotes the convenience of bilateral trade, but also enhances the complementarity and stability of the two economies.
• Acceleration of the internationalization process: The support of important trading partners has further accelerated the internationalization process of the RMB and enhanced the RMB’s status in global trade and investment.
4. Emerging markets and developing countries
List of countries: Argentina, Brazil, etc.
• Impact of external factors: Affected by external factors such as US dollar interest rate hikes, these countries face pressure from exchange rate fluctuations and rising financing costs, and therefore seek diversified currency settlement methods to diversify risks.
• The RMB becomes a choice: The RMB has become one of the choices for these countries due to its stability and lower financing costs. The use of RMB for settlement contributes to its economic stability and promotes economic cooperation with China.
• Economic stability and cooperation: The adoption of RMB settlement in emerging market countries not only contributes to the stability of their domestic economies, but also strengthens cooperation with China in trade, investment and other fields, providing strong support for the common development of both economies.
Post time: Jul-15-2024
