China’s quest to promote the yuan as a global currency still faces headwinds, with many firms abroad still resistant to using the Chinese currency, a new report shows.
According to an HSBC survey of over 700 businesses worldwide, the use of the yuan in trade settlements with the world’s second-largest economy remains sparse outside Hong Kong and mainland China.
“I think the main reason why they’re not using it is a lack of education to understand how to use it and what are the benefits. It’s not a fully convertible currency, there’s quite a lot of rules and processes that one has to go through to understand that,” said Simon Constantinides, regional head of global trade and receivables finance Asia-Pacific at HSBC.
The survey showed 52 percent of companies admitting to having a limited understanding of the internationalization of the yuan, while 38 percent said they didn’t perceive a clear benefit.