FX and Settlement Outlook for Chinese Enterprises Going Global 2025-2026: Accelerated RMB Internationalization

Current Landscape and Growth Drivers

• In 2024, cross-border RMB settlement exceeded RMB 60 trillion, accounting for about 4.5% of global payment share (SWIFT data). CIPS has nearly 150 direct participants covering over 110 countries and regions.
• Key drivers include expanded bilateral local currency settlement agreements with ASEAN, Middle East, Latin America; digital RMB cross-border pilots (e.g., e-CNY connectivity with Hong Kong, Singapore); and rising demand for FX risk management among Chinese enterprises going global.

Key Trends in the Next 1-2 Years

1. Payment Infrastructure Upgrades

• CIPS Phase II will go live, enabling 24/7 real-time settlement and reducing cross-border fund arrival time.
• Expected CIPS direct participants to exceed 200 by 2025, indirect participants over 1,500, with transaction volume growing more than 30%.
• Digital RMB cross-border payments to expand into e-commerce, supply chain finance; the first multilateral central bank digital currency (mCBDC) bridge project may land by 2026.

2. FX Volatility and Risk Management

• CNY/USD expected to fluctuate in a wide range of 7.0-7.5 (impacted by China-US interest rate differential and trade policies).
• Enterprises should adopt diverse hedging tools such as forwards, options, and currency swaps, and monitor direct exchange rates between RMB and emerging market currencies.
• Suggestion: Exporters should use RMB settlement to reduce conversion costs; importers should use bilateral currency agreements to lock rates.

3. Regulatory and Policy Environment

• The central bank will further relax macro-prudential parameters on cross-border financing, encouraging offshore bond issuance and RMB repatriation.
• AML and compliance requirements are tightening; enterprises need to strengthen KYC and transaction monitoring systems.

Challenges and Recommendations

• Challenges: Dollar dominance persists, some emerging markets have limited local currency liquidity; geopolitical risks cause settlement disruptions.
• Recommendations: Build multi-currency cash pools to diversify settlement currencies; maintain CIPS and SWIFT backup channels; utilize fintech (blockchain, APIs) to improve settlement efficiency.

Chart Description

The chart below shows the quarterly forecast of cross-border RMB settlement amount from Q4 2024 to Q4 2026 (in trillion RMB). Data based on central bank historical growth rates and industry estimates; actual figures may vary due to policy adjustments.