Renminbi adoption gains traction in Asean

[SINGAPORE] The use of renminbi is expanding in Asean, with renminbi cross-border settlements hitting 8.9 trillion yuan (S$2.8 trillion) in 2025, up 50.7 per cent year on year, according to a new Standard Chartered report released on Monday (Mar 9).

Between 2020 and 2024, cross-border settlements between China and Asean grew 19.9 per cent a year on average; China was the region’s largest trading partner throughout the period.

Standard Chartered said in the report that increased adoption of the renminbi has primarily been driven by manufacturing activity in the electronics, intermediate goods and commodity processing sectors, as well as in supply-chain diversification and procurement flows.

Patrick Lee, chief executive officer for Singapore and chief executive officer for Asean and South Asia at Standard Chartered, noted that the renminbi is also increasingly used as a hedging alternative to the greenback, particularly for companies seeking to minimise foreign-exchange risk and reduce costs associated with US dollar reliance.

“With supply chains, energy flows and capital markets increasingly centred on Asia, Asean’s adoption of the renminbi is progressing steadily and is being driven by real-economy demand rather than policy ambition alone,” he noted.

Standard Chartered noted that Singapore is the region’s “renminbi liquidity and risk-management hub” because of its regional renminbi clearing capabilities and active foreign exchange hedging markets supporting cross-border settlements. 

The Republic had earlier set up a 300 billion yuan bilateral swap line with the People’s Bank of China, which enables the Chinese central bank and the Monetary Authority of Singapore to access each other’s currencies, driving bilateral trade financing, investment and financial markets stability.

Singapore’s renminbi deposit pool has doubled in recent years and now stands at about a quarter of Hong Kong’s, reinforcing the Republic’s role as a regional centre for renminbi liquidity and clearing.

Renminbi usage has also gained traction in Thailand, Malaysia and Indonesia, in a trend that Standard Chartered attributed to “direct renminbi exchange with local currencies at major financial institutions”. 

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Internationally, renminbi growth and relevance within multi-currency frameworks will be reinforced by real-economy demand around trade settlement, supply-chain financing and balance-sheet alignment. 

Concurrently, the currency will scale across settlement, funding and investment as payment infrastructure, capital-market connectivity and offshore liquidity mature. 

However, Lee noted that the pace and depth of renminbi adoption in Asean will depend on factors such as offshore liquidity depth, the availability of renminbi-denominated investment products and hedging tools, as well as funding costs and market volatility.

Standard Chartered noted that companies embedded in China-centric supply chains would benefit from “shifting trade and financing into renminbi”, which can “reduce foreign-exchange friction, improve cash-conversion cycles and strengthen working-capital resilience”.

Karen Ng, head of China opening and renminbi internationalisation at Standard Chartered, noted that although China accounts for more than 15 per cent of global trade, less than 5 per cent of global payments are represented in renminbi.

This, she said, signals a “structural transition” in future treasury strategy.

“The question is no longer whether renminbi will play a larger role, but how deliberately corporates position their treasury and risk frameworks to engage with it,” she added.