The Chinese currency, RMB, is playing an increasingly significant role in cross-border payments as China gradually improves the quality of its economic development and the level of its openness.

According to statistics released by the People's Bank of China (PBOC), the country’s central bank, the total amount of the cross-border RMB settlement of trade in goods reached 2.2 trillion yuan ($328.4 billion) during the first four months of this year, up 26 percent from a year ago. Its share of total cross-border trade in goods has increased by 1.3 percent from the end of last year.

The amount of cross-border direct investment settled in RMB totaled 1.9 trillion yuan, up 19 percent year on year and accounting for 66 percent of the total amount of cross-border direct investment.

RMB has become much more “useful,” said a man surnamed Liu who runs an online shop in Shenzhen, south China’s Guangdong province. His shop sells electronic products from Japan and Southeast Asia.

“Payments are directly settled in RMB when I restock, so I don’t need to rack my brain on the 'triangular currency exchange’ thing,” he told People's Daily.

The rapid expansion of cross-border RMB settlement comes from the increasingly richer application scenarios of the Chinese currency.

Niu Zhipeng is a Chinese student who has been in Canada for three years. He always buy local products for his friends back at home in his spare time. “RMB has become more convenient in the recent couple of years,” he said.

According to him, the two Chinese mobile payment services of WeChat Pay and Alipay are nowadays widely available in many places in Canada, including supermarkets, tourist attractions and shopping malls, and there are an increasing number of Canadian merchants accepting payments in RMB.

“On the Chinese market, wines produced by the Argentine winery Casarena are very popular. In the past, our settlement was made in U.S. dollars. However, in the recent couple of years, we’ve been susceptible to exchange loss due to the complicated international financial situation, especially the frequent and large fluctuations in the U.S. dollar-Argentine peso exchange rate,” said Wang Shicheng, general manager of a Shanghai-based foreign trade company. Therefore, Casarena proposed to settle transactions in RMB, which would make cost accounting easier and stabilize cooperation, he said.

RMB plays a vital role in the world, and various Chinese financial services are entering the international market.

“In the first half of this year, the amount of payments received by e-commerce exporters in RMB surged 70 percent from a year ago,” said Shi Wenyi, vice president of the International Business Group of the Ant Group, a major financial services technology provider in China.

According to Shi, direct RMB settlement shortens the payment period for small- and medium-sized e-commerce enterprises from weeks to a single day, and cuts the receipt service charge from nearly 1 percent to 0.3 percent.

Besides, more and more enterprises are getting involved in the cross-border RMB settlement business. Statistics indicate that as of June 29, there were over 450 non-banking enterprises across China offering cross-border payment and receipt services, and the number kept expanding at an annual average growth of 21.83 percent between 2010 and 2021.

According to a white paper on RMB internationalization in 2021 issued by the PBOC, nearly 80 percent of corresponding enterprises from both China and overseas hoped to further increase the share of RMB settlement in cross-border payments and receipts.

Recently, the RMB Liquidity Arrangement was inked by the PBOC and the Bank for International Settlements (BIS). It will enhance China’s cooperation with the BIS, satisfy the demand of the international market for RMB and make positive contributions to strengthening the regional financial security network.

Experts predict that from the perspectives of both current account and capital account, China’s long-term high-quality economic development will help RMB open up larger space globally.