Promise or Peril: Opportunities and Challenges of Renminbi Trade Settlement and Financing

Abstract

With China’s gradual transition from its traditional role as the “World’s Factory” to an emerging “World’s Market,” the rising dependence of major multinational corporations (MNCs) on China’s efficient workers and thriving consumers has inevitably made China the front and centre of international trade. China is currently the world’s second largest economy with 10 per cent of the world’s nominal GDP and USD3 trillion of trade flows. It is estimated that by 2030 China will have 24 per cent of the world’s nominal GDP. The total trade volume of China will reach USD23.7 trillion by 2030, making China the largest importer and exporter in the world.¹