Yuan Borrowing Set to Rise Among Global Firms, Survey Shows

Businesses accelerate yuan use for operations and finance, yet its global share remains small.

  • A Standard Chartered survey reveals businesses are increasing their exposure to the Chinese yuan through revenue and supply chains, signaling its growing use beyond traditional finance.
  • Nearly a quarter of companies with existing yuan exposure plan to increase their holdings or borrowing in the next three years.
  • Despite this growth, the yuan accounts for only about 3% of global payments, a stark contrast to the dominant U.S. dollar’s 50% share.

A significant global corporate shift is underway as businesses accelerate their use of the Chinese yuan for financing, according to a recent survey by Standard Chartered conducted among 300 corporate clients. This momentum provides a substantial boost to China‘s long-standing campaign to internationalize its currency. The development highlights a strategic move away from over-reliance on dollar-denominated debt.

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Standard Chartered’s data shows corporate yuan exposure currently stems more from operations like sales and procurement than from debt. “This imbalance points to a structural underutilization of RMB financing,” the bank’s report stated. Consequently, there is significant room for growth in yuan-denominated borrowing as companies seek to diversify their currency holdings.

Meanwhile, nearly a quarter of surveyed firms with existing exposure expect to increase their yuan holdings within three years. Overall, 31% of companies anticipate their yuan financing will either increase or remain steady during that period. However, the currency’s global influence remains in its early stages.

Data from the payment messaging service SWIFT shows the yuan constitutes only about 3% of all global payments. This figure is extremely small compared to the U.S. dollar, which commands approximately 50% of settlements. These small steps represent progress from the aggressive policy push by the Xi Jinping administration.

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