China Looks To Capitalize On Trump Tariff-Induced Dollar Fallout With Multi-Pronged Steps To Boost Yuan’s Global Appeal

As U.S. President Donald Trump’s tariff policy takes some sheen off the dollar, often considered a safe haven, China wants to seize the opportunity.

A CNBC report said Beijing is promoting its currency, the yuan, aka renminbi, in an attempt to make it more appealing to institutional investors. The measures implemented to promote the country’s official currency were focused mainly on the futures market.

People’s Bank of China (PBoC) Governor Pan Gongsheng last week discussed ways to weaken excessive reliance on a single sovereign currency, the report said. 

The U.S. dollar remains the dominant global currency, but it has come under pressure from President Donald Trump’s volatile tariff policy. The Dollar Index has lost about 10% so far this year, even as equities have held up well.

The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the performance of the broader S&P 500 Index, has gained 4.20% this year, while the iShares MSCI China ETF (MCHI) has gained about 20%.

The PBoC governor discussed several measures while speaking at the 2025 Lujiazui Forum, including setting up a digital yuan international operation center to promote the use of the yuan internationally.

The report said three major Chinese exchanges have begun allowing qualified foreign institutional investors (FIIs) to trade 16 more futures and options contracts listed in mainland China. These underlying commodities covered natural rubber, lead, and tin. 

This is in addition to the dozens of other tradable futures contracts allowed for trading by FIIs earlier this year.

Citing Nanhua Futures analyst Zhou Ji, the report said these steps increase the yuan’s influence in the global commodity pricing system.

The report noted Shanghai Futures Exchange’s announcement last month it was soliciting views on a proposal to allow foreign currencies to be used as collateral for trades settled in yuan.

China has also allowed qualified foreign investors to participate in on-exchange exchange-traded fund options trading, beginning in October, for hedging purposes.

U.S. investment bank Morgan Stanley announced the launch of a futures company in China in January to provide brokerage services for China onshore commodity futures.

Despite China’s recent thrust to lure investors away from the dollar, the yuan’s international usage dipped in May, the report said, citing Swift’s RMB tracker. The yuan was the sixth most-active currency in May, dropping down a spot from the previous month. 

Swift data also showed that the U.S. dollar accounted for 48.46% of the global payments, more than double the second-placed euro's share.

The move to de-emphasize the dollar is not a China-only phenomenon, as other Asian countries have chosen to tread the same path. Driven by the motive to mitigate the risk of the Trump administration weaponizing the U.S. currency in trade negotiations, Asian nations are moving swiftly away from the greenback.

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