Latest news with #LujiazuiForum
The Diplomat
03-07-2025
- Business
- The Diplomat
China's Accelerating Efforts to Internationalize the Renminbi
In recent weeks, a cluster of news reports and commentary has drawn attention to China's accelerating efforts to internationalize the renminbi (RMB). At the Lujiazui Forum in Shanghai, The New York Times reported that People's Bank of China governor Pan Gongsheng delivered a pointed critique of global dependence on a single national currency, warning that financial risks stemming from the dominant issuer could spill over internationally and trigger crises. Without naming the United States, Pan called for a more diversified global monetary system and promoted China's digital RMB as part of the solution. According to this framing, China's current push to expand the RMB's global role is a strategic response to the vulnerabilities of dollar dependence, rather than a direct challenge to dollar hegemony. In the Financial Times, economist Gerard Lyons argued that Beijing should consider allowing a gradual appreciation of the RMB to support its international ambitions. Meanwhile, The Straits Times reported that Chinese authorities have launched a sweeping campaign to elevate the currency's role in global finance, including the expansion of China's Cross-Border Interbank Payment System (CIPS) to offshore RMB centers in Africa, the Middle East, and Central Asia, and plans to establish a digital RMB international operations center in Shanghai. This renewed focus on the global role of RMB – by both Beijing and international observers – is propelled by rising geopolitical volatility and waning confidence in U.S. monetary stewardship. These shifting conditions have not altered the direction of policy, but have reinforced and accelerated Beijing's broader, long-term strategy to reduce its reliance on the dollar and institutionalize an alternative ecosystem of trade, payments, and finance – one designed to operate alongside, rather than displace, the dominant dollar-based order. Beijing's goal is to carve out strategic space for the RMB within an increasingly fractured global system. In this emerging configuration, the RMB assumes a more prominent, though still bounded, role. A State-led Strategy of Internationalization While China is attempting to seize a strategic opening to accelerate the internationalization of the RMB, it is important to note that Beijing is not pursuing a zero-sum game against the greenback. The more revealing metric is not whether the RMB overtakes the dollar, but how successfully China is building functional alternatives, particularly in trade, finance, energy, infrastructure, and digital payments, that reduce its systemic exposure to dollar-based risks. Judging RMB progress solely by global reserve status or through the lens of dollar hegemony obscures the pragmatic, domain-specific architecture now taking shape. Since the late 2000s, Beijing has pursued a cautious, state-managed campaign to expand the RMB's role in global trade and finance. These efforts gained traction in the aftermath of the 2008 Global Financial Crisis and again during the China-U.S. trade war. Key milestones include the establishment of CIPS, the introduction of yuan-denominated oil futures ('petroyuan'), and the inclusion of the RMB in the International Monetary Fund's Special Drawing Rights basket. However, China's RMB internationalization strategy is not a direct progression toward achieving significant global reserve currency status (currently the RMB accounts for only 2-3 percent of global reserves), as this would entail extensive financial liberalization. China has avoided liberalizing its capital account or floating its exchange rate. RMB internationalization remained a means to an end – a way to hedge against geopolitical risk and strengthen China's global economic position without exposing itself to the volatility of open financial markets. What has changed in 2025 is not China's strategy per se, but the context in which it operates. With U.S. economic policy increasingly erratic, and dollar-based systems increasingly seen as instruments of geopolitical coercion – frequently deployed to sanction adversaries – Beijing perceives a window of opportunity. Recent developments – including new cross-border infrastructure, digital currency pilots, and offshore RMB market instruments – signal a potential turning point. Together, these measures lay the groundwork for broader RMB adoption by strengthening the institutional infrastructure underpinning its international use. At the same time, some observers have suggested that currency appreciation would be a more direct route to enhancing the RMB's credibility and global uptake. Lyons argued that a stronger RMB, supported by domestic policy reforms, could help anchor China's long-term ambitions for a more prominent international role. But such a move would risk undermining export competitiveness and exacerbating deflationary pressures at home, potentially harming economic growth. Rather than pursuing exchange-rate adjustments to boost the RMB's global standing, Beijing continues to prioritize institutional mechanisms that preserve domestic stability and policy autonomy. Selective Integration Over Liberalization A key feature of China's approach is its continued refusal to pursue full capital account liberalization. While some incremental easing of capital controls has occurred in recent years – notably through expanded investment quotas and a broader array of offshore RMB product offerings – the underlying architecture remains tightly managed. Instead of opening up, Beijing is cultivating a system of selective internationalization: integrating into global financial markets on its own terms, in a way that preserves domestic stability and control. Hong Kong remains the linchpin of this strategy. Its semi-autonomous status under the 'one country, two systems' framework allows for controlled experimentation in cross-border financial innovation. The city's introduction of RMB-denominated stock trading counters and its growing role in digital e-CNY ('digital yuan') initiatives that enhance connectivity between the mainland and international payments infrastructure underscore its centrality. Yet even here, China is carefully calibrating exposure to risk. This strategy reflects a broader understanding of global economic fragmentation. Rather than chasing global dominance, China is building a network of bilateral and regional arrangements that reduce dependence on dollar-based systems. From the Belt and Road Initiative to BRICS+ and currency swaps, China is embedding the RMB in a growing network of cross-border arrangements – facilitating trade and investment while maintaining control over capital flows. Building Systemic Resilience The unifying logic to this evolving strategy is building systemic resilience. For China, being able to settle critical transactions in its own currency is not just economically advantageous, but strategically necessary. As the global economic order becomes more contested and less rules-based, the ability to operate outside Western-controlled systems becomes a matter of national security. This logic also appeals to China's partners. In a world of growing financial polarization, the RMB is gaining traction not because it offers a superior alternative to the dollar, but because it offers a means of reducing exposure to U.S. policy volatility. For countries under financial sanctions, or those wary of dollar dependence, access to RMB-denominated channels offers a vital hedge. While China has been pursuing trade-based RMB internationalization – using bilateral settlements, currency swap agreements, energy transactions, and strategic partnerships to reduce reliance on the dollar without liberalizing its capital account – recent developments mark a turn toward financial market infrastructure. This shift reflects a strategy to embed the RMB more deeply in the global financial system, not merely as a medium for trade, but as part of a broader institutional architecture. Among the key measures are the establishment of a digital RMB international operations center in Shanghai, designed to promote cross-border adoption of China's central bank digital currency by streamlining transactions and reducing dependence on dollar-based systems. The rollout of a fast payment system linking Hong Kong and the mainland facilitates real-time RMB transfers for trade and services, increasing usability in cross-border commerce. In May 2025, the Shanghai Futures Exchange proposed opening domestic currency futures to overseas investors and brokers, offering onshore tools to hedge RMB exposure and supporting further financial liberalization. Meanwhile, the expansion of CIPS to offshore centers in Africa, the Middle East, and Central Asia reinforces China's push to build an alternative to SWIFT and extend the RMB's reach across emerging financial corridors in the Global South. In June 2025, CIPS also launched a pilot service for processing international letters of credit, expanding its functionality in trade finance and further reducing reliance on Western-dominated financial intermediaries. Taken together, these initiatives point to a more finance-oriented phase of RMB internationalization – less about transactional trade flows, and more about embedding the RMB in the architecture of a parallel monetary order. Toward a Multipolar Currency Order What we are witnessing in 2025 is not a radical challenge to the prevailing currency system, but the construction of a parallel one – intended not to displace the dollar, but to reduce exposure to it. China is leveraging global uncertainty to accelerate a model of selective internationalization it has long been developing. This model does not aim to overturn the existing monetary order, but to insulate China and its partners from its volatility and to expand China's influence in targeted domains. It does not seek to replace one global financial hegemon with another, but to mitigate the risks of reliance on the existing one. Rather, RMB internationalization is incremental but accelerating – a recalibration of risk, reach, and the rules of global finance. This work has received funding from the European Union's Horizon Europe coordination and support action 101079069 — EUVIP — HORIZON-WIDERA-2021-ACCESS-03. Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Research Executive Agency (REA). Neither the European Union nor the granting authority can be held responsible for them.
Business Times
02-07-2025
- Business
- Business Times
China urged to embrace stablecoins as US moves to cement lead
China faces growing calls from policy advisers and economists to explore using stablecoins for cross-border payments, as the US moves to entrench the US dollar's dominance through crypto technology. While China has not formally embraced stablecoins – digital tokens pegged to traditional currencies – and maintains a sweeping ban on crypto activities, recent remarks from senior central bank officials have given fresh momentum to discussions about their potential role in global payments. The People's Bank of China (PBOC) governor Pan Gongsheng said in June that stablecoins could revolutionise international finance, particularly as rising geopolitical tensions highlight the fragility of traditional payment systems, which he warned can be politicised and used as a sanction tool. At the same Shanghai event, former central bank governor Zhou Xiaochuan said US dollar-linked stablecoins could facilitate dollarisation. Other mainland and Hong Kong financial officials talked about the potential for yuan-based stablecoins to support China's long-running effort to promote its currency on the world stage. Beijing has long been wary of cryptocurrencies, viewing it as a threat to financial stability and capital controls. But economists now see an opening, fuelled in part by the Trump administration's growing support for digital tokens. Morgan Stanley suggests China could use Hong Kong to trial offshore yuan-based stablecoins that would avoid violations of Beijing's strict capital rules. 'Stablecoins are not new currencies, but new distribution channels for existing ones,' said Robin Xing, chief China economist at Morgan Stanley. 'It is crucial for China to embrace the trend of sovereign currency tokenisation to maintain competitiveness in the digital infrastructure race.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Just hours before Pan and other Chinese officials spoke at the Jun 18 Lujiazui Forum, the US Senate passed a bill regulating stablecoins, in a major win for the crypto industry and a boost for US President Donald Trump's digital asset agenda. Treasury Secretary Scott Bessent said in a Jun 19 X post that stablecoins could strengthen, not threaten, the US dollar's dominance. He told Bloomberg TV on Monday (Jun 30) that global users are likely to favour US-backed stablecoins over central bank digital currencies from Europe or China, citing greater trust in the private sector under US regulation than the risk of government control elsewhere. Stablecoins, typically backed by traditional currencies and issued by private firms, are gaining traction as a faster, cheaper option for cross-border payments. Most are pegged to the US dollar and backed by US assets such as short-term Treasuries, with total supply projected to reach US$3.7 trillion by 2030. In response, Chinese economists are urging the development of yuan-linked alternatives. chief economist Shen Jianguang warned that without such efforts, China risks falling behind in the race for next-generation currency leadership. Founder Richard Liu reportedly told staff the company plans to apply for stablecoin licenses in all major markets to cut cross-border payment costs by 90 per cent and reduce settlement time to under 10 seconds. Hong Kong has recently introduced its own regulatory framework for fiat-referenced stablecoins, offering licenses to issuers operating in the city. and Ant Group are among the first tech giants expected to apply. Shanghai-listed Zhejiang China Commodities City Group, operator of the world's largest wholesale goods market, has also said it plans to seek a license. Offshore yuan stablecoins could help China take advantage of mounting global unease with US dollar dominance, especially after it was used as a tool of financial pressure following Russia's invasion of Ukraine. Interest in the yuan is growing, with more than 30 per cent of China's goods trade settled in the currency in February, the highest in a decade, though its share in global payments remains modest. The growing interest in stablecoins comes as China's own state-backed digital currency, the e-CNY, has struggled to gain traction both at home and abroad. A separate cross-border payments initiative, mBridge, is facing an uncertain future after a main participant, the Bank for International Settlements, pulled out over concerns it could be used to bypass sanctions. Pan recently announced plans for an international e-CNY centre in Shanghai, signalling continued interest in promoting its use for trade. China should take a 'dual track' approach to bolster the yuan's global use, according to Li Yang, chairman of the state-backed National Institution for Finance and Development and a former PBOC adviser. That would involve continuing traditional efforts, such as expanding currency swaps and the yuan-based Cips settlement system, while also leveraging Hong Kong's financial institutions to promote offshore yuan-linked stablecoins. For now, stablecoins are mostly used for crypto trading instead of business payments, and regulators still need to address risks such as fraud and financial crime. While many countries are exploring regulations, key questions remain, such as whether stablecoins should be treated as currencies or financial assets. Chinese stablecoins may face limits without broader economic reforms, according to Eswar Prasad, a Cornell University professor and author of the book The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance. 'Yuan-linked stablecoins issued in Hong Kong are unlikely to gain much traction in the absence of unification of onshore and offshore exchange markets,' he said. But stablecoins, he added, could nudge Beijing towards change. By complicating exchange rate and monetary policy management, they might 'serve as an incentive to undertake liberalisation and market-oriented reforms', he said. BLOOMBERG
AllAfrica
27-06-2025
- Business
- AllAfrica
New tech, old hurdles: Why digital yuan won't dethrone the dollar
At this year's Lujiazui Forum, China's central bank governor Pan Gongsheng announced bold new steps to promote the digital yuan, China's central bank-issued digital currency. The governor pitched the e-CNY as a pillar of a 'multipolar' global monetary system, while pledging to open an international operation center for the digital unit in Shanghai. With real-time cross-border capabilities, programmable payments and a growing network of partner banks, the e‑CNY appears to offer a modern alternative to the dollar-dominated financial architecture – at least its creators say so. However, beneath its technological polish, the digital yuan remains tethered to the same structural constraints that have long limited the Chinese currency's global role, namely capital controls, underdeveloped financial markets and legal institutions, and a minuscule amount of assets available for purchase. Far from disrupting US dollar hegemony, without any broad structural reforms to the Chinese economy, the e-CNY will fare no better than its traditional counterpart, the renminbi (RMB). To understand the challenges the e-CNY faces in becoming a currency used in international trade, it's important to revisit the reasons for the US dollar's hegemony. Dollar hegemony owes to two interrelated roles it plays as the currency of global trade and the world's reserve currency. The US dollar is the currency of trade because it is the world's reserve currency. It is the world's reserve currency for a few reasons: there is a seemingly endless supply of it due to the US's large trade and federal budget deficits, an open capital account with plenty of liquid assets denominated in USD, and strong rule of law and transparent institutions. China is arguably lacking all of these. While the Chinese debt burden has been on the rise, reaching over 300% of GDP in 2023, China still runs the world's largest trade surplus, hitting almost US$1 trillion in 2024. Even if China demanded to trade solely with the e-CNY and all its trading partners agreed, how would the world pay for its more than 7 trillion e-CNY trade deficit with China? Where would it be able to get e-CNY, while China sucks in more money (China's exports) than it supplies to the world (China's imports)? One option could be central bank currency swaps, yet no serious analysis views this as a viable or sustainable solution. China's trade surplus (the difference between domestic savings and domestic investment) is a symptom of its weak domestic demand (the sum of consumption and investment), which in turn is a symptom of its weak domestic consumption. This is because the wildly successful Chinese development model worked by subsidizing businesses through direct and indirect transfers from the household sector. This grew savings at the expense of consumption, and chronically pushed domestic production (the sum of consumption and savings) above domestic demand. While the leadership has identified boosting consumption as their number one economic priority for the year, the sheer size of China's macroeconomic imbalance makes it a long-term problem that might take decades to solve. However, if it's able to bring its trade account balance into deficit and start supplying the world with e-CNY, China will run into a different issue blocking the widespread use of the digital yuan: which assets could you buy with the e-CNY? Since it is a one-for-one with the traditional RMB, a good starting point would be to assume that it could purchase any asset you can purchase with the RMB. Outside of China, the RMB cannot buy you much. Imagine a country that runs a consistent trade surplus with China, exporting raw materials, agricultural products or manufactured goods, and receiving e-CNY (or RMB) in return. What can it actually do with the e-CNY it earns? Beyond using it to buy Chinese goods, the options quickly dwindle. Access to Chinese equities is tightly controlled, real estate is off-limits to most foreigners and capital controls limit convertibility. The e-CNY is effectively stuck inside the Chinese financial system, with limited access for outsiders. Holding e-CNY is like collecting tokens for a theme park where most of the rides are off-limits to non-members. Without an open capital account or deeper, more accessible financial markets, the yuan, digital or otherwise, remains of limited use to the world. Take Saudi Arabia, for instance. It exports far more to China than it imports, meaning it likely ends up with excess RMB after each transaction. However, Riyadh cannot simply recycle that RMB into productive Chinese assets. Most of it likely gets converted into US dollars, the only currency with the global reach and investment ecosystem to absorb large trade surpluses. This begs the question: if foreign holders cannot reinvest their yuan earnings (either RMB or e-CNY) into profitable Chinese assets, why would they keep accumulating it in the first place? Even if foreigners could accumulate e-CNY (or RMB) easily and there could be e-CNY-denominated assets available for purchase, another roadblock that prevents widespread use of the e-CNY is the presence of strong rule-of-law safeguards and transparent institutional frameworks. Global investors and central banks rely heavily on clear, enforceable contracts, independent judicial systems and institutions that consistently disclose their regulatory and monetary policies. The US dollar benefits from a robust institutional architecture built over decades, including transparent central bank communications, independent auditing of financial systems and a judicial system widely regarded as impartial. By contrast, China's legal and regulatory frameworks governing finance remain comparatively opaque, presenting challenges for international investors seeking reliable protections for their assets. Scholars and international institutions, such as the IMF, consistently highlight transparency and institutional strength as key determinants of global currency adoption. Without substantial advances toward clearer rules, greater regulatory transparency and stronger institutional guarantees, international acceptance of the e-CNY will likely remain limited, regardless of its technological sophistication. Heraclitus, the ancient Greek philosopher, is quoted as saying, 'The only constant in life is change.' While everything discussed here holds currently, everything is subject to change. The US is keen on cutting its trade deficit with the world, and is about to pass a new law that allows the President to tax foreign capital inflows (thereby closing its capital account a bit). And international watchdogs have noted the US might be at risk of a democratic and rule-of-law backslide under Donald Trump. The e-CNY does not truly pose a threat to the dollar, at least in its current form. However, the changes listed previously might diminish dollar hegemony and eventually give way to a 'multipolar' global monetary system. In that future, China's e-CNY, after reform, may find its place, not as a revolutionary replacement for the dollar, but as one currency among many in a more diversified, multipolar monetary landscape. Anthony William Donald Anastasi is an associate professor of economics at Wenzhou Business College, Wenzhou China. His writings can be found here .
CNBC
25-06-2025
- Business
- CNBC
China doubles down on promoting yuan as confidence in U.S. dollar takes a beating
China is devising more ways for foreign institutions to use the yuan, as international confidence in the U.S. dollar falters. The moves aim at challenging the greenback, experts said, even as the U.S. dollar remains by far the world's predominant currency. The timing is favorable as the U.S. dollar index has tumbled more than 9% this year — while the offshore yuan has strengthened more than 2% against the dollar. In a sign of growing resolve in Beijing to lure the world away from the dollar, People's Bank of China Governor Pan Gongsheng Pan in a speech last week at the high-profile Lujiazui Forum discussed "how to weaken excessive reliance on a single sovereign currency." He also announced plans to set up a center for digital yuan internationalization in Shanghai and promote trading of yuan foreign exchange futures. Beijing has already rolled out a digital version of its currency to replace some cash and coins in circulation. Much of Beijing's recent moves focus on the futures market. Three major Chinese exchanges announced that starting last week, qualified foreign institutional investors would be able to trade 16 more futures and options contracts listed in mainland China. The commodities covered include natural rubber, lead and tin, according to releases on the Shanghai, Dalian and Zhengzhou exchanges. That follows the addition of dozens of other tradable futures contracts for foreign institutional investors earlier this year, according to Zhou Ji, macro foreign exchange innovation analyst of Nanhua Futures, a Hangzhou-based brokerage focused on futures products and research. Zhou pointed out that besides expanding the range of hedging products for international institutions, those contracts increase the influence of the yuan in the global commodity pricing system. In another step toward encouraging global investors to use the yuan, the Shanghai Futures Exchange announced in late May it was gathering feedback for a proposal to allow foreign currencies to be used as collateral for trades settled in yuan. Other recent moves, though incremental, include China allowing qualified foreign investors to participate in on-exchange exchange-traded fund options trading from Oct. 9 for hedging purposes. Earlier this year, authorities also reportedly announced a 500-yuan fee waiver for international financial institutions to open a local account for accessing the bond market. Morgan Stanley in January announced its local subsidiary could officially begin offering brokerage services for mainland China commodity futures, and planned to expand to equity and fixed-income futures and options once it received necessary qualifications. Such access has been years in the making, as the U.S. financial giant said it received China's approval back in May 2023 to set up a wholly owned brokerage in the country. While global finance institutions and investors have long been interested in diversifying to China, Beijing's strict controls on capital outflows and relatively opaque system have discouraged large-scale buying of mainland China assets. While some worry about the unpredictability of U.S. policies in recent months, China has yet to present itself as a dependable alternative, said Matt Gertken, chief geopolitical strategist at BCA Research. "China's rule of law is inferior to the U.S., it does not offer a large and deep pool of liquid assets that is open to foreign investors like the U.S.," he said, adding that Beijing has not been sufficiently addressing the geopolitical risks tied to its markets. It's not just investment products. Over the years, China has developed a sprawling network of offshore yuan clearing banks and promoted the cross-border interbank payment system. Increasingly, Chinese banks lending to emerging market economies have switched to the yuan instead of the U.S. dollar, partly due to lower lending costs, according to analysis published last month by the U.S. Federal Reserve. The world's second-largest economy has also been promoting bilateral trade settlement in yuan, and in February announced $100 billion for businesses in Hong Kong to access yuan-denominated financing. "China appears to be accelerating its de-dollarization efforts, though progress remains uneven," said Dan Wang, director of Eurasia Group's China team. But she noted an increase in yuan-denominated settlements of cross-border payments between energy and commodities companies in China and abroad. Another trend supporting yuan's internationalization is Chinese companies' expansion overseas, especially smaller businesses selling goods online. Startup FundPark said since its financial partners Goldman Sachs and HSBC hold offshore yuan, China-based customers can easily use it for both operations in China and overseas. Chinese authorities also subsidize some of the interest costs for loans denominated in offshore yuan, said Bear Huo, FundPark's China general manager. He said overall use of the currency remains low but growing, although he declined to share specific numbers. At a global level, the Chinese yuan lost some ground in international use in May, according to Swift's RMB Tracker. The data showed that the yuan accounted for 2.89% of global payments by value in May, the sixth most-active currency – down from 5th place in the prior month. The U.S. dollar accounted for 48.46% of global payments, followed by the euro at 23.56%, according to Swift. Beijing's latest efforts to promote the yuan coincide with a wider and more concerted shift away from the dollar in Asia recently. The region is gradually reducing its reliance on the U.S. dollar, driven by geopolitical tensions, shifting monetary dynamics, and increased use of currency hedging. Policy uncertainty by U.S. President Donald Trump has fueled a notable selloff in the greenback, which saw its steepest losses of the year in April. Overseas investors looking to diversify away from America and hedge against U.S. assets are also boosting the yuan, said Ning Sun, senior EM strategist at State Street Global. "Our proprietary data indicates strong inflows to CNY, not a surprise given the good performance of CNY financial assets. Our data tracks only institutional investors, who are still very much underweight in CNY," said Ning Sun, senior EM strategist at State Street Global.
Qatar Tribune
22-06-2025
- Business
- Qatar Tribune
China's payment system spreads across Africa and Asia amid US trade war
Agencies China's cross-border yuan payment system has signed up more financial entities from Africa, Central Asia and the Middle East, as Beijing accelerates efforts to promote the global use of its currency amid rising tensions with the United States. A group of six financial institutions officially joined the yuan-based Cross-border Interbank Payment System (CIPS) as direct participants during a ceremony in Shanghai on Wednesday, becoming the latest entities to sign up to China's alternative to the Society for Worldwide Interbank Financial Telecommunication system. The newcomers include the African Export-Import Bank, First Abu Dhabi Bank, South Africa's Standard Bank, Singapore's United Overseas Bank, the Kyrgyzstan-based Eldik Bank, and Chongwa (Macau) Financial Asset Exchange, a state-owned asset trading platform from the special administrative region, according to state broadcaster CCTV. Beijing has been promoting the CIPS – which was first launched in 2015 – as it strives to expand the use of the yuan in global trade and hedge against any potential moves by the United States to impose financial sanctions on Chinese system had 174 direct participants as of the end of May, though most of them were made up of domestic and overseas branches of Chinese banks, as well as Chinese branches of global financial giants such as HSBC, JP Morgan and Citibank. A direct participant refers to an entity that owns a CIPS account and can directly remit through the system, while indirect participants have to rely on others to complete transactions on their behalf. A total of 175 trillion yuan) of transactions was made via the CIPS last year, an increase of 43 per cent year on year. Beijing has been stepping up efforts to popularise the system in recent months as tensions with the US have risen over a slew of trade and technology issues, with Chinese officials warning of the danger of financial tools being weaponised. 'As geopolitical tensions escalate, traditional cross-border payment infrastructure is prone to being politicised and weaponised as a unilateral sanction tool, undermining the international financial order,' said Pan Gongsheng, governor of the People's Bank of China, at the Lujiazui Forum on Pan did not name a specific country during the speech, the remarks were likely aimed at Washington. Chinese academics have long warned of the danger posed by US financial sanctions targeting China, citing the Russia case, and anxiety in Beijing jumped after US President Donald Trump raised tariffs on Chinese goods to unprecedented levels in April. Though Beijing and Washington have since signed a trade truce – which included an agreement to roll back tariffs on each other's goods for 90 days – tensions remain high, with the two sides yet to agree a permanent deal to de-escalate the trade war.
