Renminbi opportunities

Synopsis

In this discussion, the head of fixed income for Asia Pacific at Alliance Bern, Hayden Brisco Hyden, addresses the significant growth of the Chinese currency, the renminbi, in global markets. Since the 2008 financial crisis, which was triggered by the collapse of Lehman Brothers, China has actively encouraged exporters and importers to settle transactions in renminbi. This shift has led to a dramatic increase in the currency's use, with 20% of global trade now settled in renminbi, up from 10% just a year ago. Brisco Hyden highlights that this trend is expected to continue, potentially reaching 40-50% in the coming years. He also notes that the renminbi has surpassed the Euro in the letters of credit market, capturing almost 9% of trade finance, despite not being freely convertible yet. This growth positions China as a crucial player in the Asia Pacific region and the global economy.