Where Do We Stand with RMB Internationalization

While China has become a net global creditor due to high trade surpluses and outbound FDI, RMB internationalization has plateaued due to a lack of attractive offshore assets and geopolitical tensions.

Key Takeaways

• 1.RMB internationalization plateaued in 2025, facing headwinds in international payments, investment, and reserves due to cooling offshore transactions and geopolitical risks.
• 2.China has transitioned from a net international debtor to a net creditor, driven by a surging current account surplus and increased outbound investment.
• 3.Hong Kong remains the critical offshore hub, accounting for significantly higher forex activity than mainland China and acting as a buffer against excessive currency movements.

Table of Contents

• Roadmap
• Macro and Forex
• Macro Environment
• Forex – Overall
• Forex – Real Exchange Rates
• Capital flows – By Type
• China Capital Flows Structural factors of higher trade surplus and outbound investment
• No rush in FX settlement
• More RMB denominated flows
• Capital flows
• Export competitiveness lifting trade surplus in goods
• Structural changes in tourism spendings and tech services
• "Go global" as the main rhyme in outward FDI
• Policy-driven moves in outbound securities investment
• Securities Investment – Bonds
• Securities Investment – Equities
• Hong Kong is an important puzzle piece
• Critical role in forex
• Interbank activities
• The visible hand
• RMB Internationalization
• Natixis RMB Internationalization Index
• RMB Internationalization – Overall
• Payments
• Financing
• Investment
• Reserves
• China's new role as an international creditor
• The missing piece – retention of outbound RMB
• China setting stage for Dim Sum bond
• Summary

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