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China advances RMB internationalization

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By Qiu Haifeng

The Chinese currency Renminbi (RMB), or the yuan, has been increasingly used as international currency in recent years, gaining popularity as a payment, investment, and reserve currency in the global market.

As China’s economy recovers and its financial market further opens up, the yuan’s investment and hedging functions have strengthened.

Panda bonds, or yuan-denominated debts sold by foreign issuers in China, have been well-received.

According to the 2023 Yuan Internationalization Report released by the People’s Bank of China (PBOC), China’s central bank, 58 panda bonds were issued from January to August 2023, totaling 106 billion yuan ($14.79 billion). This represents a year-on-year increase of 58.2 percent, surpassing the total number and amount of issuances from the previous year.

The macro-prudential management bureau of the PBOC announced on November 9 that various channels for mutual stock market access, such as the Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect, mutual recognition of funds, Bond Connect, the Shanghai-London Stock Connect, and the Cross-boundary Wealth Management Connect, have been opened and optimized.

The policy framework for supervising qualified investors has been consistently enhanced and it has become easier for foreign entities to issue panda bonds. Additionally, Chinese stocks and bonds have been incorporated into major international indices. These developments have collectively contributed to an enhanced investment and financing environment for the yuan.

As of the end of September 2023, a total of 1,110 foreign institutions had entered the Chinese bond market, holding 3.3 trillion yuan in Chinese bonds, an increase of nearly 200 percent compared to five years ago. Domestic RMB financial assets held by overseas entities, including stocks and bonds, had reached 9.3 trillion yuan.

As foreign institutions continue to expand their presence in the domestic bond market, offshore yuan trading has also witnessed a surge in activity.

In late October, two yuan clearing banks were inaugurated, including one in Islamabad, Pakistan, which marked the official launch of yuan clearing services in the country. Additionally, the Industrial and Commercial Bank of China (ICBC) Vientiane Branch in Laos held a ceremony to commence yuan clearing services. This development increased the number of yuan clearing banks established by China in Southeast Asia to five.

“The yuan is assuming a growing significance in the global economy and financial markets,” stated Jameel Ahmad, governor of the State Bank of Pakistan. The establishment of a yuan clearing bank will help reduce costs for local banking systems and support Pakistani businesses in exploring new markets, thereby contributing to the long-term development of the Pakistani economy and banking system, Ahmad added.

Since 2022, China has established yuan clearing banks in Laos, Kazakhstan, Pakistan, and Brazil. It has continuously enhanced the overseas yuan clearing network, resulting in smoother cross-border transactions for trade and investment. Presently, the PBOC has authorized 31 yuan clearing banks in 29 countries and regions, encompassing significant international financial centers globally.

“Since last year, the connectivity and cooperation between domestic and foreign financial markets have strengthened, resulting in a broader selection of offshore yuan products and enhanced facilitation and liberalization of cross-border investments,” stated a representative from the PBOC.

According to a survey by the Bank for International Settlements (BIS), the yuan’s market share in global foreign exchange transactions has surged from 4.3 percent to 7 percent in the past three years. This has resulted in a rise in its ranking from the eighth place to the fifth.

This growth has made the yuan the currency with the fastest-growing market share, as offshore entities increasingly adopt it for foreign exchange and risk management purposes.

Multiple sectors have shown optimism regarding the future prospects of the yuan’s internationalization.

Argentina has announced its plan to use the equivalent value of yuan under the China-Argentina currency swap agreement to repay its external debt and interest owed to the International Monetary Fund. This decision comes after Argentina’s previous use of the yuan to repay matured external debt at the end of June.

In July 2023, the Bolivian government announced that the state-owned bank Banco Unión has started trading operations involving the yuan. Marcelo Montenegro, Bolivian Minister of Economy and Public Finance, stated that the yuan trading operations have gotten off to a good start in the country. Montenegro highlighted the potential for increased utilization of the yuan within the framework of the Belt and Road Initiative (BRI).

“More countries are now participating in yuan transactions, and the internationalization of the currency is advancing rapidly,” Montenegro expressed. He further stated that the yuan is expected to play a more significant role in future international trade activities.

More companies have expressed their confidence in the yuan. The PBOC recently released the Market Survey on the International Use of the RMB in 2022.

The survey, conducted among over 3,600 domestic and foreign commercial enterprises, found that around 82.8 percent of the companies are considering using the yuan in cross-border transactions or increasing its usage. This represents the highest level in recent years. Additionally, 71.8 percent of the foreign commercial enterprises surveyed expressed a preference for using the yuan as the currency for trade financing with China, marking the highest intention in the past three years.

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China’s new chapter in global innovation

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By Gu Yekai, Liu Yiqing, People’s Daily

At a smart construction project site managed by China State Construction Engineering Corporation, a quiet technological revolution is underway. Amid cranes and concrete, engineers are deploying advanced artificial intelligence (AI) systems that could fundamentally reshape the construction industry.

Li Fengjian, an AI specialistwith Xianyuan Technology, detailed how the company’s latest intelligent system – built on a large model – adapts to complex construction environments.”Engineering machinery equipped with intelligent agents can adjust its operations automatically in response to weather conditions,” Li explained, adding that a spatiotemporal sensing network further enhances the system, providing real-time tracking of both personnel and materials throughout the construction site.

In February this year, Xianyuan Technology rapidly integrated its self-developed model with DeepSeek-R1, effectively blending a general-purpose framework with industry-specific models. This integration, Li noted, has produced a solution capable of delivering expert-level performance in challenging, dynamic environments. The firm is based in the Shanghai Foundation Model Innovation Center, aburgeoning AI incubator that now hosts over 200 innovative enterprises.

China’s technological transformation extends well beyond the construction sector. Overthe past three decades, the country has evolved from its initial forays into internet connectivity to becoming a key player in global digital innovation.

Here, a steady stream of technological innovations are emerging, from the early days of emails and web browsing to the cutting-edge technologies represented by DeepSeek and the dynamic evolution of social media.

Wu Jianping, an academician at the Chinese Academy of Engineering and headof the Zhongguancun Laboratory, pointed out that while China had introduced only one internet standard before 2005, it now contributes to over 200 worldwide. Such strides illustrate the country’s concerted push toward high-level technological self-reliance – a journey marked by both persistence and determination.

Beyond the digital realm, China is makingsignificant inroads in aerospace, new energy, and other high-tech sectors. It has transitioned from being a follower to standing shoulder-to-shoulder with global leaders, and in some areas, even taking the lead. Wu attributed these achievements to a dynamic ecosystem of policy reforms and talent cultivation that encourages creativity and technical expertise at every level.

Amid intensifying international competition, collaborative research and the integration of new technologies with traditional industries are central to China’s high-quality economic development.

Mei Linhai, a researcher at China’s State Key Laboratory of Cognitive Intelligence, remarked that the age of AI calls for continuous exploration. “In this era, everyone is an innovator. Only by persistently pushing the boundaries can we remain at the forefront of both technological and industrial development,” Mei observed.

In the field of general-purpose AI, Mei emphasized that independent innovation is paramount. He advocates for a self-driven industrial ecosystem that leveragesbreakthrough technologies to boost productivity and unlock new possibilities, Mei said.

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Chinese democracy in action:a village bench meeting shapes national law

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By Wei Zhezhe, Liu Botong, People’s Daily

In a modest corner of Jiangmen, south China’s Guangdong province, residents of Weidong village are experiencing firsthand a form of democracy that starts at the grassroots level and reverberates all the way to Beijing.

Wu Tengxin, a local villager who relies on a scooter for daily mobility after contracting polio, recalls a time when the village’s public spaces were ill-equipped for people with disabilities. Now, thanks to a simple suggestion made during a meeting, his everyday life has changed.

In November 2022, a team from a local legislative outreach office – a branch of China’sNational People’s Congress (NPC) – visited Weidong village and set up a “bench-style meeting.” Residents, including the elderly and those with disabilities, gathered to voice their concerns about inadequate accessibility.

Amid the conversation, Wu offered a straightforward proposal: “I hope rural accessible facilities can be improved to make mobility easier for people with disabilities and the elderly.” His words were relayed verbatim to lawmakers.

The response was swift. On June 28, 2023, at the third session of the 14th NPC Standing Committee, legislators passed a law on building a barrier-free living environment. The law stipulates that improvements”shall align with social and economic development levels, coordinate urban and rural progress, and gradually narrow the gap in infrastructure between urban and rural areas.”

Today, Wu observes that the village’s main roads and public squares have been upgraded with accessibility features that make getting around considerably easier.

This episode illustrates what Chinese officials call “whole-process people’s democracy” – a system where citizen input is woven into every stage of policy development.

Jilie Ziri, head of Abuluoha village in Butuo county, southwest China’s Sichuan province, remarked that for young generations in China, democracy has become a lived experience. “Villagers are the masters of village affairs,” he said, emphasizing how active villager participation has injected new vitality into local governance.

Experts point to consultative democracy as a cornerstone of this process. Tao Kaiyuan, vice chairman of the Central Committee of the China Association for Promoting Democracy and vice president of the Supreme People’s Court, underscores the important role of the Chinese People’s Political Consultative Conference, whose members hail from every stratum of society and bring a wealth of expertise and connections.

Their regular forums, field research, and public consultations have created robust channels for citizens to contribute ideas and forge consensus.”This approach gathers collective wisdom and transforms public voices into policy,” Tao said.

Another crucial manifestation is the effectiveness of China’s political party system. Under the leadership of the Communist Party of China, Chinese democratic parties actively fulfill their duties, offering recommendations that often translate into concrete policy decisions. This integrated approach demonstrates the unique strengths of China’s political system and the advantages of whole-process people’s democracy.

Tao emphasized that whole-process people’s democracyhas evolved into an efficient and dynamic democratic practice – one that not only reflects the essence of socialist democracy but also presents a pioneering model of political civilization, contributing Chinese wisdom and solutions to global governance and democratic development.

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Chinese modernization: blueprint for global progress

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By He Yin, People’s Daily

At China’s recent annual “two sessions,” Chinese modernization once again captured global attention. International observers are closely following a range of new measures designed not only to accelerate Chinese domestic transformation but also to unlock fresh opportunities for global development.

They believe that Chinese modernization, built on a foundation of openness and cooperation, will continue to yield global benefits with each new milestone.

Today, China stands as a formidable force in the global economy – accounting for around 18 percent of the global economy and nearly 30 percent of world manufacturing output. Year after year, the nation has contributed about 30 percent to global economic growth. With import and export records with almost all countries and regions designated in the United Nations Statistics Division, the country is a major trading partner for more than 150 countries and regions. In 2024, its exports to over 160 countries and regions saw growth.

Often hailed as the “world’s largest developing country,”the “second-largest economy,””world’s factory,””global market,” and “innovation powerhouse,” China is increasingly viewed as a beacon of stability and progress.

In recent years, high-profile events such as the seventh China International Import Expo – where intended deals exceeded $80 billion – and the establishment of over 1.239 million foreign-invested enterprises have reinforced the nation’s reputation as a vast, dynamic market.

Meanwhile, policies encouraging Chinese companies to “go global” have seen a steady stream of new technologies, goods, and services permeate international markets, knitting the country ever tighter into global value chains and bolstering its commitment to win-win cooperation.

The influence of Chinese modernization is evident far beyond its borders. In the Central African Republic, President Faustin-Archange Touadera has repeatedly screened China’s political documentary Carry the Reform Through to the End for cabinet discussions, while officialsin Uzbekistan are adapting China’s poverty-reduction experience to suit their national context. These moves challenge the assumption that modernization must follow Western models, suggesting that China’s alternative pathway offers a viable route to development.

Beyond economic growth, Chinese modernization is increasingly celebrated for its potential to foster win-win cooperation and shared prosperity.

Under the Belt and Road Initiative (BRI), for example, Kazakhstan secured its first maritime access and Laos launched its first modern railway. Support from the Global Development and South-South Cooperation Fund has propelled over 160 projects, benefiting more than 30 million people. Moreover, China has given all the least developed countries with which it has diplomatic relations zero-tariff treatment for 100 percent tariff lines, signaling its commitment to an open and inclusive global economy.

China’s modernization agenda also tackles global challenges head on. In response to global environmental risks, China advocates for building a community of all life on the Earth. To bridge the digital and AI divide, it has launched the AI Capacity-Building Action Plan for Good and for All to ensure that technological advancements benefit every corner of the globe.

On the security front, China continues to promote dialogue and reconciliation in conflict zones while engaging in multilateral security collaborations, reinforcing its reputation as a nation committed to peace and stability.

By proposing initiatives such as the Global Development Initiative, the Global Security Initiative, and the Global Civilizations Initiative, China is not just charting its own course toward modernization but championing an equal and orderly multipolar world and a universally beneficial and inclusive economic globalization – one that seeks to ensure that no nation is left behind on the path to prosperity.

The global appeal of Chinese modernization is far from accidental. Decades of reform and opening up have accelerated its development while enabling the country to contribute to global governance. On the international stage, it has taken on a leadership role – actively shaping global norms, building a community with a shared future for mankind, and advancing world peace and development. By sharing its successful experiences and technological advancements, the country seeks to help other developing countries chart their own courses toward progress.

With over 1.4 billion people engaged in this modernization journey – a number that surpasses the total population of all developed countries combined – China’s approach is redefining the global modernization landscape. For China, modernization is not solely a national endeavor but a blueprint for global progress – a vision that promises a more inclusive future for all.

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