Reminbi market should play a bigger role so that the Chinese currency can be better accepted global

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Renminbi retains fourth position on strong exports, world's confidence

The renminbi saw its share of global payments by value hit a record high of 3.2 percent in January, up from 2.7 percent in December.

This helped the Chinese currency to retain fourth place in the global list, behind the US dollar, the euro and the British pound.

The data were disclosed by the Society for Worldwide Interbank Financial Telecommunication, known as SWIFT, a global financial messaging services provider, on Thursday.

Experts attributed the renminbi's strong performance in global payments to China's rising value of exports and the international community's increasing willingness to use the Chinese currency.

Measured by payment value, renminbi payments in January rose by almost 11 percent from a month earlier, while that of all the other currencies contracted by 6.48 percent during the same period, SWIFT said.

The global supply chain has met with many difficulties, especially due to the COVID-19, with trade and logistics services disrupted in overseas markets. But orders have been pouring in to China thanks to its resilient supply chain. As China's imports and exports grow, renminbi-denominated settlements have been more frequently used in international trade.

Against the US dollar's rising volatility, the renminbi's stable foreign exchange rate has strengthened international investors' confidence in using the Chinese currency for cross-border trade, investment and financing.

Data provided by the General Administration of Customs earlier this month showed that the total value of China's goods imports and exports in 2021 expanded more than 21 percent year-on-year to top 39 trillion yuan.

Morgan Stanley predicted that the renminbi will become the world's third-largest reserve currency in 2030. The currency already ranks fifth in the International Monetary Fund's latest data.

However, the renminbi's international position at present does not match the size of China's economy, said Zhang Chun, a professor at the Shanghai Advanced Institute of Finance.

The US accounted for the largest share of 24.4 percent of the world's GDP in 2021, while China came in second with 17.9 percent. But the US dollar accounted for nearly 40 percent of global payments in January, according to SWIFT, in contrast to the renminbi's 3.2 percent.

Reminbi market should play a bigger role so that the Chinese currency can be better accepted globally. Just like more and more products have been accepted for more people around due to beter prices and quality.