A clerk counts renminbi banknotes in Hai'an city in eastern China's Jiangsu province. AP
A clerk counts renminbi banknotes in Hai'an city in eastern China's Jiangsu province. AP
A clerk counts renminbi banknotes in Hai'an city in eastern China's Jiangsu province. AP
A clerk counts renminbi banknotes in Hai'an city in eastern China's Jiangsu province. AP

China's yuan gains traction as international trade settlement currency


Sarmad Khan
  • English
  • Arabic

China's currency is gaining significant importance in international trade as the yuan’s share as a global trade settlement currency continues to grow, despite the shrinking overall trade pie amid China’s weakening exports to western countries.

The Standard Chartered Renminbi Globalisation Index (RGI), the UK bank’s proprietary measure of international yuan usage, rose 26.6 per cent in 2022, topping the 18.5 per cent growth recorded in 2021, Standard Chartered said in a recent research note.

“This is no small feat, in our view, considering the impact on market sentiment from strong headwinds such as rising global rates, US dollar strength, global geopolitical uncertainties, local Covid disruptions and slowing China growth,” Kelvin Lau, Standard Chartered’s senior economist for greater China, and Edward Pan, the bank’s China macro strategist, said in the report.

“We see this as a conviction that renminbi [yuan] internationalisation remains on a multi-year uptrend, with the drivers likely broadening beyond the Dim Sum [bonds] market in 2023, starting with a rebound in foreign holdings of onshore equities.”

Although the RGI fell for two straight months to 3,366 in January, it had risen for seven consecutive months to a record-high of 3,452 in November.

Three of the five RGI components contributed to the latest drop, including cross-border payments, which was partly dragged down by slower production and trade activity around the Chinese Lunar New Year.

The Dim Sum bonds market — bonds denominated in Chinese currency and issued in Hong Kong — also continued to do the heavy lifting, extending its “impressive streak of positive RGI contribution to 17 straight months”, according to the report.

The popularity of the yuan to settle international trade deals signifies its growing importance in the global financial system.

In 2022, 42.1 trillion yuan ($6.1 trillion) worth of the country’s cross-border payments and receipts were settled in the Chinese currency, up 15 per cent from the previous year, marking the fifth straight annual increase, Chinese news website Caixin global said, citing a People’s Bank of China February report.

The share of yuan settlements in the total value of goods trade and foreign direct investment reached 18 per cent and 70 per cent, respectively, both hitting new highs in recent years, according to the report.

At the end of last month, China and Brazil reached a deal to trade in their own currencies, ditching the US dollar as an intermediary, the Brazilian government said.

The deal will enable China, the top rival to US economic dominance, and Brazil, the biggest economy in Latin America, to conduct their massive trade and financial transactions directly, exchanging yuan for reals and vice-versa, instead of going through the dollar.

China, the world’s second-largest economy, has similar deals with Russia, Pakistan and several other countries.

In February, the Central Bank of Iraq announced plans to allow trade with China to be settled directly in the yuan currency for the first time to improve its access to foreign currency.

The six-member economic bloc of the GCC is also looking to deepen its trade and investment relations with China and the two sides are edging closer to signing a free trade agreement.

While a Gulf-China FTA has been on the table for nearly two decades, the deal received fresh impetus after China’s new Foreign Minister Qin Gang, in February, called for it to be finalised “as soon as possible” during a telephone conversation with Saudi Arabia’s Foreign Minister Prince Faisal bin Farhan.

A GCC-China FTA could be signed as early as this year, Nasser Saidi, president of Nasser Saidi & Associates and former chief economist of the Dubai International Financial Centre, said at the time.

Chinese President Xi Jinping’s recent visit to Saudi Arabia is likely to open doors to “more diverse use of the renminbi for trade and investment over time”, Standard Chartered economists said.

During the trip, Mr Xi mentioned making a full use of the Shanghai Petroleum and National Gas Exchange as a platform to carry out yuan settlement of oil and gas trade.

He also proposed oil and gas settlements denominated in the yuan with the GCC countries within three to five years.

“While we believe the rise of the so-called ‘petroyuan’ remains a long-term aspiration rather than an instant game-changer [currently, Saudi-related Swift messaging volume in Renminbi, for example, is not even 1 per cent of Russia’s], the potential is clear as day, with China being the largest oil importer in the world and the Middle East welcoming China investment to help with its economic diversification,” Standard Chartered said.

The lender said the RGI tracks the change in cross-border yuan usage in absolute terms, making it “vulnerable to prolonged weakness in overall external trade flows — a risk in the coming quarters as US and European growth is likely lose momentum from prior aggressive tightening".

“We, however, continue to take comfort from the fact that renminbi-settled goods trade stayed high as a share of total China goods trade, at 20.1 per cent in Q4-2022 versus 19.7 per cent in Q3, maintaining its gain from H1’s 17.6 per cent average,” Standard Chartered economists said.

“Having bottomed at 11.8 per cent in 2017, this also pushed the 2022 full-year average to 18.8 per cent after failing to rise above 15 per cent in 2020 and 2021.”

The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

Paltan

Producer: JP Films, Zee Studios
Director: JP Dutta
Cast: Jackie Shroff, Sonu Sood, Arjun Rampal, Siddhanth Kapoor, Luv Sinha and Harshvardhan Rane
Rating: 2/5

COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ESmartCrowd%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3ESiddiq%20Farid%20and%20Musfique%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%20%2F%20PropTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3E%24650%2C000%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2035%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EVarious%20institutional%20investors%20and%20notable%20angel%20investors%20(500%20MENA%2C%20Shurooq%2C%20Mada%2C%20Seedstar%2C%20Tricap)%3C%2Fp%3E%0A
Company%20profile
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Timeline

2012-2015

The company offers payments/bribes to win key contracts in the Middle East

May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

October 2021

Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

May 2025

The High Court of England and Wales approves the company’s restructuring plan

July 2025

The Court of Appeal issues a judgment challenging parts of the restructuring plan

August 2025

Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision

October 2025

Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange

November 2025

180 Petrofac employees laid off in the UAE

MATCH INFO

Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid

When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid

Pari

Produced by: Clean Slate Films (Anushka Sharma, Karnesh Sharma) & KriArj Entertainment

Director: Prosit Roy

Starring: Anushka Sharma, Parambrata Chattopadhyay, Ritabhari Chakraborty, Rajat Kapoor, Mansi Multani

Three stars

UAE currency: the story behind the money in your pockets
Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

The specs

Engine: 2.0-litre four-cylinder turbo

Power: 268hp at 5,600rpm

Torque: 380Nm at 4,800rpm

Transmission: CVT auto

Fuel consumption: 9.5L/100km

On sale: now

Price: from Dh195,000 

Key findings of Jenkins report
  • Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
  • Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
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  • Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

Contracted list

Ashton Agar, Alex Carey, Pat Cummins, Aaron Finch, Peter Handscomb, Josh Hazlewood, Travis Head, Usman Khawaja, Nathan Lyon, Glenn Maxwell, Shaun Marsh, Mitchell Marsh, Tim Paine, Matt Renshaw, Jhye Richardson, Kane Richardson, Billy Stanlake, Mitchell Starc, Marcus Stoinis, Andrew Tye.

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

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England

Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, Tottenham Hotspur

Italy
AC Milan, Inter Milan, Juventus

Spain
Atletico Madrid, Barcelona, Real Madrid

How the UAE gratuity payment is calculated now

Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.

The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.

1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):

a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33

b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.

2. For those who have worked more than five years

c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.

Note: The maximum figure cannot exceed two years total salary figure.

yallacompare profile

Date of launch: 2014

Founder: Jon Richards, founder and chief executive; Samer Chebab, co-founder and chief operating officer, and Jonathan Rawlings, co-founder and chief financial officer

Based: Media City, Dubai 

Sector: Financial services

Size: 120 employees

Investors: 2014: $500,000 in a seed round led by Mulverhill Associates; 2015: $3m in Series A funding led by STC Ventures (managed by Iris Capital), Wamda and Dubai Silicon Oasis Authority; 2019: $8m in Series B funding with the same investors as Series A along with Precinct Partners, Saned and Argo Ventures (the VC arm of multinational insurer Argo Group)

Avatar: Fire and Ash

Director: James Cameron

Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana

Rating: 4.5/5

The years Ramadan fell in May

1987

1954

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Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley

Director: Rupert Wyatt

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The specs: 2019 Mercedes-Benz C200 Coupe


Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km

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Updated: April 05, 2023, 7:10 AM