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.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.