Unable to Strengthen the 'King Dollar'... Chinese Media Alone Promotes the Yuan

Global Payment Influence Stagnates... Russian Share Increases
"Yuan Assets Attractive from Investment Perspective," Self-Praise

[Image source=Yonhap News]

[Asia Economy Beijing=Special Correspondent Kim Hyunjung] Despite the continued weakness of the Chinese yuan amid the strong dollar phenomenon, local media have started promoting their own currency. They praised the yuan as becoming a more attractive asset for foreign investors, citing the recent collapse of trust and reputation in the U.S. dollar system.

On the 3rd, China’s state-run Global Times cited the latest report from the International Monetary Fund (IMF), reporting that the yuan accounted for 2.88% of global foreign exchange reserves in the second quarter, ranking fifth worldwide. It stated, "This is the highest figure since the related statistics began in 2016," and added, "The yuan is in a phase of internalization and global optimism regarding the long-term development momentum of the Chinese economy." However, the related reserve share remains the same as in the first quarter (2.88%). Despite China’s efforts both domestically and internationally to expand the yuan’s influence, the figures remain stagnant.

The yuan’s value remains weak against the dollar. On the 28th of last month, the yuan’s value dropped to as low as 7.2647 yuan per dollar in the offshore market, and it currently continues to hover around 7.1 yuan per dollar.

The trend in the yuan’s share of global payments in the international market is also unimpressive. According to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the Chinese yuan accounted for 2.31% of total global payments in August, with the amount increasing by 9.25% compared to the previous month. However, the payment share has declined compared to the end of last year (2.7%) and early this year (3.20%).

According to China’s own diagnosis, the yuan’s influence is rapidly expanding notably in Russia. The SWIFT monthly report shows that Russia ranked third (3.9%) in yuan usage outside mainland China in July, sharply rising from seventh place (1.42%) in the previous month. The media explained this by saying, "The strengthening of Western economic sanctions on Russia has exposed the risks of excessive reliance on the dollar and euro, stimulating other countries to seek alternative payment options such as the yuan." It also diagnosed, "The rise of the yuan’s global status comes as the credibility and reputation of the U.S. dollar system, which recklessly and irresponsibly pushed the world into recession through monetary policy, face increasing risks of collapse."

Chen Jia, a researcher at the International Monetary Institute of Renmin University, emphasized to this media outlet, "European and U.S. financial markets are gradually sharing the perception of the decline of the dollar system and will recognize the trend of yuan internationalization in the long term." The Global Times also quoted Mingming, chief researcher at state-owned Zhongxin Securities, who stressed, "From an investment perspective, yuan-denominated assets, including bonds, stocks, and other assets, are becoming increasingly attractive to foreign investors and institutions."

This content was produced with the assistance of AI translation services.