In July this year, the State Administration of Foreign Exchange (SAFE) issued the "Foreign-related Receipts and Payments Form for Banks on Behalf of Customers", which shows the income and expenditure of China's cross-border transactions. According to the table, in July, China's cross-border transaction revenue was 3,603.1 billion yuan in RMB terms, and the expenditure was 3,685.2 billion yuan, with a total of 7,288.3 billion yuan. Among them, RMB income was 1,772.3 billion yuan, expenditure was 1,884.8 billion yuan, and the total amount was 3,657.1 billion yuan, accounting for 50 percent of the total cross-border transactions2%, exceeding 50% for the first time.
This data reflects the improvement of the status of the renminbi in cross-border transactions, and is also the result of the opening and internationalization of China's financial market. Since March this year, the renminbi has surpassed the US dollar in cross-border transactions to become the first currency, accounting for 484% gradually rose to 50% in July. In the first half of the year, there was not a single month below 50%.
It's important to note that we're talking about cross-border transactions, not cross-border transactions. Cross-border transactions are a broader concept that includes cross-border** and cross-border capital and financial projects. Cross-border goods are further divided into cross-border goods and services, which involve the purchase and sale of tangible goods and intangible goods respectively. Cross-border capital and financial projects include direct investment, ** investment, other investment and income transfer.
From the perspective of various sectors, the proportion of RMB in cross-border transactions is uneven. Cross-border cargo** is the most widely used area of RMB, but it only accounts for 23%, and there is still a lot of room for improvement. According to the central bank's "Report on the Implementation of China's Monetary Policy for the Second Quarter of 2023", in the first half of the year, the proportion of RMB in China's cross-border receipt and payment of goods in domestic and foreign currencies rose to 23%, an increase of 67 percentage points. This shows that there is still great potential for the use of RMB in goods, and with the optimization of the scale and structure of China's goods, the role of RMB will be further played.
In contrast, the renminbi accounts for a much higher proportion of cross-border capital and financial accounts, and it is also more stable. Among them, direct investment, ** investment, other investment and income transfer and other sectors, the proportion of RMB is more than 70%, and even more than 80% in some months. Although these sectors are not as eye-catching as goods, they are the main driving force for the RMB to account for more than 50% of cross-border transactions, and they are also an important embodiment of the openness and internationalization of China's financial market.
Cross-border services** are also an important area for the use of RMB, covering a variety of services such as tourism, intellectual property, international finance, and cross-border transportation. RMB also accounts for more than 60% of cross-border services**, but the scale of China's cross-border services** is still far lower than that of cross-border goods**, resulting in its contribution to the proportion of RMB in cross-border transactions is not significant enough. Therefore, China also needs to strengthen the development of cross-border services, improve the quality and efficiency of services, and increase the use of RMB in services.
To sum up, the elevation of the status of RMB in cross-border transactions is the result of the opening and internationalization of China's financial market, as well as the result of the combined effect of various factors. Among them, cross-border capital and financial projects are the main driving force for RMB to account for more than 50%, and cross-border goods** and cross-border services** are important areas for the use of RMB, but there is also a lot of room for improvement. In the future, with the development of China's economy and society, the role of RMB in cross-border transactions will be further enhanced, providing more support for China's financial stability and international cooperation. This article is generated by Bing and is for informational purposes only and does not represent any views or positions.