Yuan outpaces dollar for inbound and outbound China trade

Yuan outpaces dollar for inbound and outbound China trade

11 months ago, we shared data from China’s State Administration of Foreign Exchange that showed that the volume of outbound cross-border payments made in yuan (CNY) had outstripped those made in US dollars for two months in a row, while the currency remained a close second for inbound payments. Now the same has been achieved for inbound cross-border payments in CNY, and both continue to climb.

The yuan now leads Chinese cross-border trade payments
Share of China's non-bank cross-border transactions by currency, Jan 10-Mar 24

Over the past year, inbound non-banking cross-border payments to China, also referred to as receipts, have had several periods where CNY has consistently taken a greater share than USD. From May to September, CNY represented a greater share than USD, and from January 2024 until March, the most recent month available, it did so again.

Outbound non-banking cross-border payments from China, meanwhile, have seen CNY take a greater share every month since March 2023, with the gap widening significantly over the past year. USD made up its third-lowest share ever in March 2024, at 41.4% of outbound payments, behind July 2023 (41.2%) and August 2023 (39.6%).

Notably, both inbound and outbound payments in CNY now account for more than 50% of all non-banking cross-border payments, with both having done so for the past two months. In March 2024, outbound payments in CNY were 53.2% of the total, while inbound payments in CNY were 52.6%. 

This represents a dramatic change over the last 15 years, with CNY having a less than 1% share at the start of 2010 for both inbound and outbound payments and only passing 25% in 2013 for outbound payments and 2014 for inbound payments. It also comes as overall volumes have climbed significantly over the same period, increasing by over 600% between 2010 and 2024. 

However, year-on-year changes have been more volatile amid wider macroeconomic uncertainty. While February 2024 saw outbound and inbound volume increase 25% and 27% YoY respectively, March 2024 saw declines of -22% and -20% respectively. Nevertheless, April is likely to see a return to growth, with Beijing last week reporting that China’s exports and imports had risen above forecasts in the month. 

How is cross-border payments policy shaped by FXC Intelligence’s data?

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