Standard Chartered China CEO told reporters that the Chinese currency will not displace the U.S. dollar in global reserves in the foreseeable future, underscoring the bank’s view on the yuan’s limits despite Beijing’s push to expand its reach.
“There is no way, at least in my career, for the RMB to challenge the USD,” Jean Lu said at a media roundtable in Singapore. She added that while overtaking the dollar is unrealistic, the yuan could compete with other second-tier currencies. “Compared to the yen or pound, the RMB may have a chance,” she said.
Standard Chartered China CEO on yuan’s role in global finance
China has laid out plans to elevate the renminbi’s profile in international markets. The country’s latest five-year plan calls for expanding use of the currency through instruments such as Panda and Dim Sum bonds, which are renminbi-denominated issues in onshore and offshore markets.
Some investors are reassessing reliance on the U.S. dollar amid concerns over U.S. government debt and Washington’s use of sanctions. That has encouraged shifts to alternatives like the Swiss franc, the euro, or gold. Even so, the dollar accounted for 57% of global foreign exchange reserves in the first quarter of 2026, according to the International Monetary Fund. The IMF’s figures show a one percentage point increase from the prior quarter, largely due to the dollar’s modest appreciation. The yuan’s share stood at 2%, up from 1.95%.
Lu pointed to limited offshore liquidity as a key constraint on wider yuan adoption, citing China’s capital controls that restrict cross-border flows. “We are talking about less than 2 trillion yuan, with almost half of it being in Hong Kong,” she said.
The People’s Bank of China is leading efforts to internationalize the currency. This year, the central bank named major institutions, including Deutsche Bank, as offshore clearing banks to ease European access to the RMB and introduced new repo facilities to help foreign central banks secure yuan liquidity.
Regional momentum and use cases
Use of the yuan is expanding in Southeast Asia, a core trading partner for China. Settlement volumes between China and Southeast Asia reached 8.9 trillion yuan (about $1.3 trillion) in 2025, a 50.7% year-on-year increase, according to a March report from Standard Chartered.
ASEAN companies are also turning to RMB capital markets for hedging and fundraising. In June, Singapore Airlines entered the offshore yuan market with a 1.5 billion yuan Dim Sum bond issue.
Geopolitics is contributing to the currency’s traction. U.S. sanctions on Russia following the invasion of Ukraine prompted Moscow’s partners, including China and India, to use the yuan for trade. After U.S. strikes on Iran earlier this year, Tehran asked shippers transiting the Strait of Hormuz to pay tolls in yuan.
Trade between Southeast Asia and China is at record levels, supported by new infrastructure such as the Pinglu Canal linking southwestern China to the Beibu Gulf, which can reduce logistics costs by up to 30%.
“Southeast Asia is not too far from China, and has similar languages, culture and shared heritage,” Patrick Lee, Standard Chartered’s ASEAN and Singapore CEO, said at the Sept. 29 roundtable. He said supply chain shifts and geopolitical changes are drawing Chinese companies to build manufacturing ecosystems in ASEAN.
Still, the region faces strain from Chinese overcapacity. Thailand saw more than 2,000 factory closures in 2024 amid a flood of cheaper Chinese steel and other goods, while Indonesia’s textile producers struggled to compete, according to Shay Wester of the Asia Society Policy Institute.
Even so, Lee and Lu argued that China is focused on producing within Southeast Asia, not just exporting there. “China’s larger state-owned enterprises and privately owned enterprises are definitely coming to Southeast Asia to lay down their roots and invest for the long term,” Lee said. Lu said concerns about simple export of overcapacity overlook a wider trend. With the risk of tariffs and trade frictions, she said many are urging Chinese firms to manufacture locally and help develop industries and skills. She called it a golden opportunity for both China and ASEAN.