Group 1: Core Insights - The appreciation of the RMB is expected to raise concerns about its impact on China's exports in 2026, as higher prices could weaken competitive advantages[1] - Since 2018, the sensitivity of China's exports to exchange rate changes has decreased, with "technical barriers" becoming the main competitive strength over "price advantages" due to product upgrades[1] - The proportion of RMB settlements in international trade is gradually increasing, which is expected to further reduce the impact of exchange rate fluctuations on exports[1] Group 2: Historical Review - Historical data shows that during the RMB appreciation cycles from December 2016 to April 2018 and from May 2020 to March 2022, export growth remained stable, recovering from -6.3% to over 10% and from -3.5% to 13.4%, respectively[2] - Export recovery often precedes RMB appreciation by about one quarter, indicating that rising exports may contribute to RMB appreciation rather than the other way around[2] Group 3: Factors Reducing Impact of RMB Appreciation - The actual effective exchange rate of the RMB has decreased to approximately 88.6% as of November 2025, down 16.7% from its peak in March 2022, enhancing the price competitiveness of exports[2] - The RMB's purchasing power in international markets has increased due to appreciation, benefiting imports and reducing reliance on depreciation for export competitiveness[2] - The share of labor-intensive exports is declining, while the proportion of intermediate and capital goods exports is increasing, reflecting a shift towards more technology-intensive products[2] Group 4: Trade Settlement Trends - In 2024, RMB cross-border payments for goods trade reached approximately 12.4 trillion yuan, a 15.9% increase year-on-year, with RMB settlements accounting for 27.2% of total cross-border payments, up 2.4 percentage points from 2023[2] - The RMB settlement ratio is significantly increasing in trade with emerging markets, particularly in regions like ASEAN and Africa, where growth rates of 21.8% and 35.9% were recorded, respectively[2] Group 5: Risk Considerations - There are uncertainties regarding U.S. tariff policies, which could negatively impact exports if additional tariffs are imposed[2] - A potential downturn in the U.S. economy could adversely affect global demand, posing risks to China's export performance[2]

Core Viewpoint - Russia's recent large-scale reduction of its RMB assets has sparked widespread speculation about potential shifts in Sino-Russian relations, despite experts suggesting this is a normal market adjustment rather than a sign of deteriorating ties [3][16]. Group 1: Background and Context - Following the outbreak of the Russia-Ukraine conflict in 2022, Western nations froze approximately $300 billion of Russia's overseas assets, primarily in USD and EUR, prompting Russia to seek alternative currencies for its foreign exchange reserves [1][5]. - The share of RMB assets in Russia's foreign exchange reserves peaked at around 17% by the end of 2023, with a total value exceeding $15 billion, driven by increased trade settlements in RMB, particularly in energy transactions [8][10]. Group 2: Recent Developments - As of September 2025, Russia's total international reserves reached $713.3 billion, with foreign exchange reserves at $431 billion, while the RMB asset holdings have significantly decreased, potentially falling below $30 billion [3][10]. - The total value of RMB assets that Russia has reduced since their peak has surpassed $45 billion, leading to speculation about the depth of the Sino-Russian partnership [5][14]. Group 3: Economic Implications - The Russian economy has shown signs of instability, with a growing budget deficit and fluctuating ruble exchange rates, which have led to increased domestic demand for RMB for imports from China [10][11]. - In 2024, bilateral trade between China and Russia reached a record $244.8 billion, with 95% of transactions settled in RMB and rubles, indicating a significant shift in trade dynamics [10][12]. Group 4: Central Bank Actions - The Central Bank of Russia has implemented measures to stabilize the ruble, including increasing the daily sale of foreign currency and RMB, while also issuing RMB-denominated bonds to alleviate liquidity issues [10][11][14]. - By October 2025, the Central Bank's strategy involved a systematic reduction of remaining euro-denominated assets, focusing on maintaining gold, rubles, and RMB as core reserve assets [11][14]. Group 5: Market Reactions and Future Outlook - Analysts view the recent asset adjustments as a normal market response rather than an indication of a strategic shift, with Russia's total reserves having increased by 20% since 2022 [16]. - The ongoing evolution of the international monetary system is seen as gradually diminishing the dominance of the USD, while the RMB's role in international reserves continues to grow, positively impacting Sino-Russian economic relations [16].