The balances of global trade are being reshaped in recent years within the framework of increasing geopolitical tensions and espically the strategic competition between the United States (USA) and China. As part of a larger-scale transformation strategy conducted through China’s currency, the call for state-owned enterprises to “prioritize the use of yuan in overseas transactions” within the framework of the announcement made by the Central Bank of China on April 21, 2025, is a sign of a wide economic transformation process. The timing of the announcement coincides with a period when mutual dependency in world trade is breaking down, economic nationalism is rising, and the global dominance of the dollar is being questioned more frequently. This carries the step taken far beyond being just a technical policy announcement.
US President Donald Trump’s increasing of tariffs on China to 145 percent shows that tax policies in global trade continue to be used as a pressure and alignment tool. This move reveals that global trade is increasingly becoming the ground for political and economic reckonings. Beijing, with its response to this situation, has demonstrated that it is not only retaliating, but also developing structural countermoves. The guidance provided by the People’s Bank of China indicates that not only passive reactions but a more strategic and planned counter-step is being taken. In this process, it is clearly seen that China is not only remaining in a defensive position, but also taking steps to determine the rules of its own economic order. Calls to increase the use of yuan in foreign trade can be evaluated as part of this strategy. These trade wars started by Trump by increasing tariffs to 145 percent also bring about a deep questioning about the nature of global trade. China has not only reacted to this questioning and pressure, but also aims to have a say in the global economic order.
The elements included in the announcement of the People’s Bank of China indicate that the goal in question is intended to be supported by a holistic infrastructure transformation. The strengthening of the Cross-Border Interbank Payment System (CIPS), research on the use of blockchain technology in financial transactions, and encouraging commercial banks in Shanghai to extend cross-border credit point to a process carried out not only with incentives but also with increasing institutional capacity.[1] The aim is not only for China’s currency to be used more, but also for this usage to be based on a secure, low-cost, and technologically competitive foundation.
These mentioned elements show that the yuan’s gaining more place in global trade is not only an economic goal, but also that the necessary infrastructure transformation for this is being actively planned. This transformation is not limited to the expansion of financial instruments but is also supported by the increase in institutional capacity. Especially the strengthening of the Cross-Border Interbank Payment System (CIPS) is part of China’s strategy to gain a more independent and robust place in global trade. The development of CIPS is an important step for the yuan to become a safe and efficient mediator of international trade. Additionally, the research on the use of blockchain technology in financial transactions carries the aim of transforming China’s financial system in accordance with the requirements of the digital age. This reveals that China aims not only to strengthen the traditional financial infrastructure but also to build a more secure, low-cost, and technologically competitive financial ecosystem. The incentives for commercial banks in Shanghai to extend cross-border credit enable financial institutions to actively participate in this transformation process, making it possible for the process to be carried out not only with state guidance, but also with the contribution of the private sector.
The announcement also stated that support would be given for the Shanghai Gold Exchange to collaborate with other overseas exchanges.[2] This step aims to make the yuan more recognized internationally not only as a trade medium but also as a measure of value. The widespread use of yuan reference prices in global markets shows that China aims to carry its financial sovereignty not only to the East Asian geography but to a much wider global scale. Such steps are concrete reflections of China’s desire to have more say in the global order not only through production and exports but also through monetary policy and financial infrastructure tools.
China’s move also shows the flexibility of the state capitalism model. The monetary policy guidance conducted through public enterprises is a sign of a structure where economic strategy is shaped at the central level and implemented in a coordinated manner, unlike Western-type market economies. Thanks to this structure, the recommendations of the Central Bank can find response not only among financial actors, but also directly on public companies operating and producing abroad. In this sense, the state is not only a regulatory authority but also an implementing and guiding economic actor.
It is necessary to read these developments not only as China’s domestic policy reflexes but also as a counter-position triggered by the increasingly aggressive economic foreign policy of the United States. The customs tariffs implemented by the Trump administration serve not only as a risk of economic loss for China but also as a warning to reduce systemic dependencies. In this context, making the yuan more widespread has become a strategic necessity for China. This step will also make China more visible in the construction of alternative institutional and monetary structures in the global system.
In conclusion, China’s efforts to use the yuan more effectively in global trade can be evaluated not only as an economic strategy but also as an important step towards reshaping international power balances. This move shows that China aims to play a more independent and effective role in the financial system and displays a strong will to determine its own rules in the global economic order.
[1]“China central bank urges state-owned businesses to prioritise yuan in overseas expansion”, Reuters, https://www.reuters.com/world/china/china-central-bank-urges-state-owned-businesses-prioritise-yuan-overseas-2025-04-21/, (Date Accessed: 22.04.2025).
[2]“China’s central bank promotes yuan usage in overseas expansion”, Investing.com, https://www.investing.com/news/economy-news/chinas-central-bank-promotes-yuan-usage-in-overseas-expansion-93CH-3993042, (Date Accessed: 22.04.2025).
