Photo: press.lv
Chinese leader Xi Jinping has called for the yuan to become a global reserve currency, in one of Beijing’s clearest signals yet of its ambition to strengthen China’s position in the international monetary system, the Financial Times reports.
In comments published in Qiushi, the Communist Party’s main ideological journal, Xi said China must build a “strong currency.” He outlined several objectives for the yuan:
it should be widely used in international trade and investment;
it should be actively traded on global currency markets;
it should gain official reserve currency status, meaning central banks around the world would hold it to ensure financial stability.
To support this ambition, Beijing needs to build a solid financial foundation, including a “strong central bank” capable of effective monetary policy management, as well as globally competitive financial institutions and financial centres. These remarks were originally delivered in a speech to senior officials in 2024 but were made public only recently.
Challenging a weakening dollar
The publication of Xi’s comments comes amid renewed uncertainty in global markets. The recent weakening of the US dollar — which President Donald Trump last week described as a “great thing” — has prompted central banks to reassess their reserve assets. The situation is further complicated by leadership changes at the US Federal Reserve and heightened geopolitical tensions.
Analysts say China is increasingly sensitive to shifts in the global order and wants the yuan to become a strategic counterweight to the dollar as the international financial system fragments. Pan Gongsheng, governor of the People’s Bank of China, has predicted the emergence of a “multipolar currency system,” in which the yuan would compete more evenly with other major currencies.
Obstacles remain
Since Russia’s full-scale invasion of Ukraine in 2022, the yuan has become the second most-used currency in trade finance. However, its share in official foreign exchange reserves remains small:
- US dollar: about 57% of global reserves as of Q3 2025 (down from 71% in 2000);
- Euro: around 20%;
- Yuan: just 1.93%, ranking sixth globally.
Analysts stress that for a genuine breakthrough, China would need to allow full convertibility of the yuan and liberalise its capital account. The IMF has also urged Beijing to address domestic imbalances, including deflationary pressures that have led to a significant depreciation of the real exchange rate.
China’s trading partners have criticised what they see as an undervalued yuan, which helped drive China’s record $1.2tn trade surplus last year. In response, the People’s Bank of China says it does not intend to use a weak currency to gain trade advantages and aims to keep the yuan stable as a store of value.
