Standard Chartered Bank: ASEAN Renminbi Internationalization Led by Supply Chain | Lianhe Zaobao

Standard Chartered Bank released a report on Monday (March 9) indicating that the internationalization of the renminbi in ASEAN is increasingly driven by manufacturing activities, procurement exchanges, and the development of regional supply chains. In other words, supply chains dominate the use of the renminbi in ASEAN. According to the People's Bank of China's report on renminbi internationalization (2025), cross-border renminbi settlements between China and ASEAN are expected to surge by 50.7% to 8.9 trillion renminbi in 2024, with an average annual growth rate of 19.9% over five years. Standard Chartered believes that there are three main drivers of renminbi internationalization in ASEAN: first, the integration of the Regional Comprehensive Economic Partnership (RCEP), which promotes the diversification of regional trade currencies; second, the diversification of supply chains, which is related to the deepening of the production network between China and the ASEAN corridor; and third, the connections in manufacturing, particularly in the fields of electronics, intermediate products, and commodity processing. It points out that China continues to hold a central position in the production network in ASEAN, with the use of the renminbi in trade settlements steadily increasing as companies match currencies with actual business flows. Further Reading China's foreign exchange reserves reached USD 3.4278 trillion at the end of February, increasing for seven consecutive months Renminbi financing scale hits a record high of USD 200 billion, China promotes currency internationalization with results With the support of major financial institutions providing direct exchange services between the renminbi and local currencies, the internationalization of the renminbi has made significant progress in Thailand, Malaysia, and Indonesia. Singapore continues to serve as the center for renminbi liquidity and risk management in the ASEAN region, with the central banks of both countries having established a 300 billion renminbi bilateral currency swap arrangement. Singapore also provides regional renminbi clearing capabilities and an active foreign exchange and hedging market to support cross-border settlements According to the report, for ASEAN enterprises, the opportunities brought by the renminbi are continuously accumulating through high-frequency trade transactions. Settling in renminbi can eliminate one party's foreign exchange conversion costs, shorten cash turnover cycles, and improve working capital efficiency. Over time, many enterprises are expanding the application of renminbi into trade financing and supplier financing, concentrating renminbi funds in regional funding centers to enhance liquidity visibility and control. Efficiency is often considered the main advantage of renminbi payments. However, the report argues that a more strategically significant advantage lies in its optionality, especially in today's world where diversification has become a strategic imperative. As the global payment system becomes fragmented, this optionality enhances the execution certainty of trade and supply chains related to China