Cover Story: How the Renminbi is Taking Over the Dollar’s Role in Global Trade
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In the first half of 2025, the U.S. dollar tumbled across the board, sliding against the euro, pound and renminbi (RMB) in what many global investors are calling its “worst six months in modern history.”
Behind the plunge is the fallout from U.S. President Donald Trump’s second-term trade policies — particularly a renewed obsession with “reciprocal tariffs” — and a growing crisis of confidence in America’s fiscal discipline and central bank independence. The dollar, once untouchable, is suddenly looking vulnerable.
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What Happened When
- 1996：
- China achieved current account convertibility.
- 2014：
- Shanghai’s Free Trade Account system was launched.
- Since 2014：
- Connect programs linked Shanghai and Hong Kong capital markets.
- 2015：
- China last implemented a major overhaul of its exchange rate regime.
- Since 2015：
- Both inbound and outbound direct investments in China have been registered directly at banks without prior approval.
- Since the 2008 global financial crisis：
- The People’s Bank of China has signed bilateral swap agreements with 32 countries, totaling about 4.5 trillion yuan.
- 2021：
- The domestic-foreign currency integrated cash pool for multinationals was piloted.
- 2023：
- RMB surpassed the euro to become the world’s second-largest trade finance currency.
- 2024：
- CIPS processed 175 trillion yuan worth of transactions, up 43% year-on-year.
- 2024：
- Dim sum bond issuance hit 1.07 trillion yuan, up 36.7% year-on-year.
- 2024：
- Hong Kong processed 224.5 trillion yuan in RMB payments, up 41.2% from the previous year.
- 2024：
- London cleared over 100 trillion yuan in RMB FX trading; Hong Kong handled 68.9 trillion yuan.
- 2024：
- The UK and Singapore followed with 16.1 trillion yuan and 9.7 trillion yuan in RMB payments, respectively.
- June 2024：
- mBridge entered minimum viable product phase and began pilot programs in several Chinese cities.
- Late 2024：
- Approval was given to build the digital RMB international operations center in Shanghai.
- Late 2024：
- More than 1,000 overseas financial institutions had opened RMB clearing accounts.
- February 2025：
- Hong Kong launched a 100-billion-yuan RMB trade finance facility.
- March 2025：
- Four major regulators issued a roadmap to expand Shanghai’s Free Trade Account framework.
- April 2025：
- Central bank proposed expanding the cash pool program nationwide.
- May 2025：
- Peter Burnett addressed the Caixin London Atlantic Dialogue on China’s capital account openness.
- First half of 2025：
- The U.S. dollar experienced a significant decline against major currencies, described as its 'worst six months in modern history'.
- First half of 2025：
- Dim sum bond market continued to boom, with expanded issuer participation.
- June 2025：
- The European Central Bank, in its report, highlighted unusual cross-asset correlations caused by U.S. tariff hikes.
- June 2025：
- Foreign institutions held 1.15 trillion yuan in domestic RMB loans.
- June 2025：
- Hong Kong’s RMB deposits dropped to 882 billion yuan.
- June 2025：
- Central Financial Commission called for Shanghai to become a global RMB asset allocation and risk management hub within 5–10 years.
- June 2025：
- PBOC announced the establishment of a digital RMB international operations center in Shanghai.
- July 2025：
- China's central bank proposed new rules to expand participation in CIPS.
- July 2025：
- RMB usage accounted for nearly 54% of outbound payments by Chinese entities.
- July 2025：
- Hong Kong’s RMB deposits rebounded to 938 billion yuan.
- By July 2025：
- Panda bond issuance surged nearly 140% year-on-year to 100.8 billion yuan.
- By July 2025：
- Bank of China (Hong Kong) had processed nearly 200 mBridge transactions totaling over HK$11 billion, with 80% in RMB.
- August 1, 2025：
- Hong Kong passed its Stablecoin Regulation Ordinance.
- August 2025：
- China and New Zealand signed a new 25-billion-yuan currency swap agreement.
- August 2025：
- Kazakhstan’s Jiaxin International dual-listed in Hong Kong and Astana, issuing the first Central Asian stock denominated in RMB.
- August 2025：
- Industrial and Commercial Bank of China became the first bank to operate free trade accounts across all five major FTZs.
- By August 2025：
- CIPS connected more than 1,700 direct and indirect participants across 180 countries.
- By August 2025：
- Outstanding offshore RMB sovereign bonds in Hong Kong, Macau, and London reached a record 176 billion yuan.
- As of 2025：
- There are 35 RMB clearing banks in 33 jurisdictions globally.
- 2025：
- The New Development Bank issued 7 billion yuan in Panda bonds.
- 2025：
- Beijing approved 680 billion yuan in offshore RMB bond issuance through Hong Kong (20% increase over 2024).
- 2025：
- China issued 60 billion yuan in offshore RMB bonds in Macau.
- 2025：
- Shanghai piloted 'FT Plus', a new generation account system for FTZs.
- 2025：
- PBOC experimented with offshore trade finance reforms in the Lin-gang special area of Shanghai.
- 2025：
- Scope of Bond Connect Southbound trading was expanded to include brokerages, insurers, and mutual funds.
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