Sheng Songcheng: The RMB may be at a favorable juncture to play a role as an international financing currency.

On April 14th, Sheng Songcheng, senior academic advisor of the China-EU Lujiazui International Finance Institute and president of the China Chief Economist Forum Research Institute, stated at the "China-EU Lujiazui Finance 50 Forum - Spring Conference 2026" that the demand for cross-border RMB investment and financing from enterprises going global is increasing day by day. The RMB may be at a favorable time to play the role of an international financing currency. It is necessary to improve the construction of the offshore financial system and maintain the basic stability of the exchange rate.

Sheng Songcheng believes that China's foreign trade achieved an unexpected growth in the first quarter of this year. The market breadth and operational depth of Chinese enterprises' international operations have been continuously strengthened. The RMB may have a favorable opportunity to play the role of an international financing currency.

Specifically, Sheng Songcheng stated that due to the impact of geopolitical conflicts, the international liquidity environment is tightening. However, China adheres to a moderately loose monetary policy stance, and it is expected that the financing interest rate of the RMB will remain low for a long time. Against this backdrop, the RMB has an advantage in terms of funding costs as a financing currency, and its financing currency function is continuously strengthening.

Sheng Songcheng suggests that China should improve the construction of its offshore financial system and maintain the basic stability of the exchange rate. First, increase the supply of safe assets denominated in RMB in the offshore market, make the regular issuance of RMB treasury bonds and central bank bills abroad, and improve the RMB interest rate curve in the offshore market.

Second, enhance the collaborative interaction between Shanghai and Hong Kong as financial centers, steadily promote the high-level opening up of China's financial market, strengthen Shanghai's global resource allocation function as an international financial center, build an offshore financial system commensurate with Shanghai's status as an international financial center, and support enterprises in going global at a high level.

Third, we will adhere to the decisive role of the market in determining the exchange rate, maintain exchange rate flexibility, and at the same time strengthen expectations management to keep the RMB exchange rate basically stable at a reasonable and balanced level. This will be conducive to expanding the space for two-way investment cooperation.

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