The yuan’s rise in global trade is losing momentum and adoption outside of the Asia-Pacific region remains limited as complex rules deter companies, an annual survey by HSBC Holdings PLC found, highlighting the challenge for China as it seeks to internationalize its currency and open up its capital markets.
SLIDING ADOPTION
The London-based lender, which interviewed 1,610 businesses worldwide with at least US$3 million in annual sales, said 17 percent of those surveyed were using the yuan to settle transactions, down from 22 percent a year earlier.
Use in Germany slid to 7 percent from 23 percent and in France fell to 10 percent from 26 percent.
There is “insufficient publicity about potential benefits for renminbi settlement and complex China regulations continue to be the key reasons for low yuan use,” Vina Cheung, global head of yuan internationalization at HSBC in Hong Kong, said in an e-mailed response to questions.
GREATER CHINA
“Yuan use remains primarily driven by the Asia-Pacific markets, specifically the Greater China region,” she added.
More than half of Hong Kong companies are using the yuan in cross-border business, the highest in the 14 markets surveyed by HSBC from Jan. 7 to Feb. 12.
The semi-autonomous territory was followed by Taiwan and mainland China, which have use rates of 38 percent and 35 percent respectively.
The adoption of the yuan for trade settlement continues to rely on China’s macroeconomic stability and the development of its capital markets, Cheung said.
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