China’s yuan: Beijing to build solid ‘breakwater’ to curb risks amid accelerating internationalisation push

China has been pushing to make its currency, the yuan, more widely used internationally. However, the government is being cautious and wants to ensure safety due to the unpredictable global situation. The People's Bank of China (PBOC) stated in a recent article that they are focused on managing the risks that come with opening up their economy to the world.

President Xi Jinping has emphasized that the process of making the yuan more international should be stable and secure. The approach has become more conservative, with a greater emphasis on avoiding financial risks. Despite the yuan losing value against the US dollar, it has seen increased use in international trade, particularly with countries involved in the Belt and Road Initiative.

Hong Kong's Financial Secretary, Paul Chan Mo-po, mentioned that Hong Kong will play a significant role in the yuan's international growth. Hong Kong is a major center for the yuan's international transactions, and the goal is to expand the range of investment and risk management options for the yuan in Hong Kong. This strategy is expected to encourage more international use of the Chinese currency.