China Sets Sights on Yuan Internationalisation in New Five-Year Plan

China's central bank has outlined its strategic priorities for the next five years in a new plan, with a focus on increasing the global use of the yuan. The People's Bank of China aims to make the currency more widely accepted in international trade, investment, and financing, as well as develop offshore yuan markets. This move is part of Beijing's push to promote yuan internationalisation and reduce reliance on the US dollar-based global financial system.

The PBOC also plans to strengthen the cross-border yuan payment system, making it more multi-tiered and broad-based. This aligns with China's vision of becoming a major 'financial powerhouse', as stated in its recent reform and development blueprint. The plan will be accompanied by nine specific action plans.

Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered, noted that stand-alone five-year plans issued by the central bank are relatively uncommon. He linked this move to the emphasis on building a 'strong central bank' in China's vision of becoming a financial powerhouse.