China Aims to Strengthen Yuan’s Global Role Amid Rising Trade Tensions

Beijing, April 2025 —The Chinese government has unveiled a plan aimed at enhancing cross-border financial services. This initiative, announced by a senior official from the People’s Bank of China (PBOC), comes at a time when global trade tensions are mounting.

Earlier this week, the central bank encouraged state-owned enterprises to prioritize the yuan in their payment and settlement processes as they expand their operations internationally. This directive is part of a broader strategy to increase the yuan’s global footprint amid the challenges posed by escalating trade conflicts.

Lu Lei, deputy governor of the PBOC, emphasized the complexities of the current external environment during a press briefing in Beijing. “The forces driving global economic growth are insufficient, while protectionism is on the rise,” he remarked. Lu noted that the multilateral trading system is facing significant obstacles, with increased tariff barriers impacting the stability of global production and supply chains.

In light of these challenges, Lu urged Chinese companies to accelerate their overseas investments and highlighted that improvements in cross-border financial services would be instrumental in promoting yuan usage in international trade and investment.

This announcement follows recent actions from the U.S. government, including the implementation of “reciprocal” tariffs under President Donald Trump, which have disrupted global trade dynamics and created volatility in financial markets.

China’s President Xi Jinping has also been actively pursuing stronger ties in the region, having recently visited three Southeast Asian countries to encourage trade partners to resist unilateral pressures.

According to the financial messaging service SWIFT, the yuan remains the fourth most active currency for global payments by value, holding a 4.13% share as of March. Notably, the yuan’s cross-border usage surged to a record $724.9 billion last month, accounting for 54.3% of all China’s cross-border activities, as reported by the country’s foreign exchange regulator.