Yuan rapidly gaining ground as Chinese firms plot global expansion

Core Viewpoint - Chinese companies are increasingly using the yuan for financing and payments in their international operations, enhancing the currency's influence in global trade and investment [1]. Group 1: Company Insights - Sieyuan Electric, a Shenzhen-listed company, reported that 10% of its total orders were priced and settled in renminbi, indicating a growing trend among its partners to transact in yuan [2]. - The company operates in various countries, including the UK, Italy, Saudi Arabia, and Kuwait, and has strong incentives to settle transactions in yuan due to mutual supplier and customer relationships [3][4]. - Universal Energy, a renewable energy developer, utilized favorable yuan financing by borrowing 256 million yuan for a wind power project in Kazakhstan [7]. Group 2: Industry Trends - The People's Bank of China reported that the use of the yuan in cross-border payments reached 35 trillion yuan (approximately US$4.9 trillion) in the first half of the year, marking a 14% increase from the previous year [5]. - The willingness of non-Chinese clients to settle in yuan is particularly high among countries involved in the Belt and Road Initiative, such as Pakistan, Thailand, and Malaysia [6]. - The competitive interest rates of the renminbi, currently at 3% for one-year loans and 3.5% for five-year loans, are contributing to reduced financing costs for companies [6].