Yuan trumps yen and Hong Kong dollar to become region’s top currency for doing business with China

The yuan is now the region’s leading currency for doing business with China, trumping the Japanese yen and the Hong Kong dollar as Beijing aggressively pushes its currency through international trade channels.

The currency now accounts for 31% of payments exchanged with China, up from 7% just three years ago, according to latest data from payments provider Society for World Interbank Financial Telecommunication.

As Asian countries increasingly trade directly with China and Hong Kong, the yuan is dominating as a payments currency. Its ascent comes as China opens clearing centers across the world, signs bilateral currency-swap deals and grants investment quotas to foreign investors. Data from Swift excludes central banks.

Last month, the yuan became one of the top currencies used by Canada for payments with China and Hong Kong. China recently appointed four clearing centers in the region, pushing forward the goal of making the currency more accessible and widely used. Data from Swift shows that the yuan accounts for more than 50% of payments exchanged between China and Singapore, Taiwan, South Korea and the Philippines.

Since 2012, of 26 countries in the region using the yuan for direct payments with China and Hong Kong, only nine are considered low users, compared with 19 in 2012.

The Chinese currency remains the fifth-most-used currency for global payments, accounting for just over 2% of payments across the world.