Hong Kong is the main offshore yuan market in the world. This is where offshore yuan (CNH) is traded, through which non-residents of China gain access to yuan instruments without the participation of the mainland market (CNY). The placement of government bonds of the Ministry of Finance of China in Hong Kong is a direct increase in the supply of yuan assets for international investors.
This week, this is the second such placement in a row: earlier, the NBK expanded its yuan REPO operations by 7 days, 1 month and 3 months. Two steps in one direction — the liquidity of the international yuan is growing systematically.
Why is the international yuan rising
Several structural factors have coincided. First, the yuan's share in global trade settlements has exceeded 5% and continues to grow, primarily due to Russia, Iran, Central Asian countries and, increasingly, the ASEAN countries. Second, central banks in a number of countries are building up yuan reserves as an alternative to the dollar and the euro. Third, the Hormuz crisis of 2026 revealed the vulnerability of the dollar system and accelerated the diversification of settlement channels.
The Hong Kong placement of government bonds by the Ministry of Finance is not so much about raising funds (China does not need money from these issues) as it is about creating reliable benchmarks for the yuan yield curve outside of China. This makes the yuan more predictable and convenient for international contracts.
What does the growth of the yuan mean for Russian importers?
The growth of the yuan against the dollar, while the ruble weakens against the dollar, creates double price pressure on purchases from China in ruble terms. At the beginning of 2026, the yuan was trading around 10.3 rubles. Now it is 10.97–11.10. By the end of the year, the forecast is 11.5–12.0 rubles.
In practice, a shipment of goods from China worth 1 million yuan at the beginning of the year cost 10.3 million rubles. With a yuan of 12.0— this is already 12 million rubles. The cost increase is 16.5% only due to the exchange rate. With prices unchanged at the supplier and ruble prices for the buyer, this is a direct margin squeeze.
Practical implications for calculations
For companies operating through CIPS: the increased liquidity of the yuan in the international market potentially reduces transaction costs through CIPS and makes calculations faster. For companies with yuan account balances: it is more profitable to keep an operating reserve in yuan than to convert it into rubles between transactions — the yuan is in a growth trend.
