Reuters – China plans to give foreign investors greater access to its financial markets and encourage wider use of the yuan as global investors seek alternatives to US dollar assets amid trade tensions and market uncertainty.
People’s Bank of China (PBOC) Governor Pan Gongsheng said Beijing would continue opening its capital markets and promoting the yuan’s international use, citing geopolitical risks, changes in the global economy and rapid advances in artificial intelligence.
“China’s steady economic growth, and rapid development of high-tech industries provide solid support for RMB assets,” Pan said in a speech Thursday on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank.
The push comes as US President Donald Trump’s trade policies and tensions with major trading partners have raised concerns among investors about their exposure to dollar-denominated assets.
Pan said China would encourage wider international acceptance of yuan-denominated bonds as collateral, improve financial connections with overseas markets and expand offshore yuan trading.
The central bank also plans to develop more tools to help investors manage financial risks and facilitate cross-border investment.
China has been seeking a bigger role for the yuan in international trade and finance, although the US dollar remains the dominant global reserve currency.
Pan’s remarks followed calls from IMF Managing Director Kristalina Georgieva for China to reduce its dependence on exports and strengthen domestic consumption.
The central bank governor also acknowledged the need for China to shift toward consumer-driven growth.
In a separate speech Friday, Pan said global trade and financial imbalances could not be resolved simply by adjusting exchange rates.
He attributed the imbalances to differences in countries’ economic structures, weaknesses in the international monetary system and persistent fiscal deficits and high consumption in some economies.
Pan made the comments during a meeting attended by European Central Bank President Christine Lagarde and European Commissioner Valdis Dombrovskis.
China’s latest commitments signal its intention to attract more international capital and expand the yuan’s global role as investors reassess risks in major financial markets.
