China has belatedly disclosed a two-year-old speech by President Xi Jinping calling for the yuan to become a global reserve currency. Beijing is also significantly easing overseas lending regulations for allied nations including African countries, expanding the yuan's use as an international payment method beyond trade settlement.
According to state news agency Xinhua on Thursday, Xi's key article titled "Follow the Path of Financial Development with Chinese Characteristics and Build a Financial Powerhouse" was published in the Communist Party's theoretical journal Qiushi the previous day. The article is an excerpt from a closed-door speech Xi delivered to senior Party officials in January 2024.
Xi identified "a strong currency" as the first key financial element for China to become a financial powerhouse, emphasizing that the yuan "should be widely used in international trade, investment, and foreign exchange markets while achieving global reserve currency status." The Financial Times noted that "Xi's remarks provide the clearest definition yet of the 'strong currency' goal, as China's leadership has long worked to promote the internationalization of the yuan."
Foreign media particularly noted that China's decision to release the two-year-old speech now—amid heightened global financial market uncertainty—signals Beijing is openly revealing its ambitions for yuan internationalization.
China has been working to internationalize the yuan for more than a decade. Recently, it has been expanding yuan payment trials centered on Belt and Road Initiative participating countries, particularly in Africa. Starting Thursday, Beijing eased regulations to allow overseas yuan funds to be used for corporate working capital and facility investment in addition to trade settlement, while doubling the total lending quota from 100 billion yuan to a maximum of 200 billion yuan ($27.4 billion).
Backed by policy support, the yuan's share of global foreign exchange transactions rose sharply from 2.2% in 2013 to 8.5% last year. However, analysts say this remains limited relative to China's economic size and standing. The yuan accounts for only 1.93% of global foreign exchange reserves, ranking seventh and far behind the US dollar at 57%. China's partial control over the yuan exchange rate also remains an obstacle to achieving reserve currency status. The FT pointed out that "incentives to hold the yuan can only expand significantly when capital markets are opened and full convertibility is achieved."
