The Resilience of Dollar Hegemony and the Short-Term Fluctuations of RMB

In May 2025, SWIFT released the latest global payment currency rankings, showing that the US dollar maintained its dominance as the most active global currency with a payment share of 48.46%. The euro ranked second at 23.56%, while the RMB dropped from 3.5% in April to 2.89%, falling to sixth place. This shift occurred amid growing calls for “de-dollarization,” drawing widespread attention. Why does the US dollar remain “unshakable” in a turbulent global economic environment? And why has RMB internationalization seemingly experienced a “precipitous decline”?

Despite repeated downgrades of the US sovereign credit rating in recent years and the persistent escalation of global trade wars, the US dollar’s status as the world’s reserve currency remains unchallenged. Behind this resilience lies the dollar’s deep-rooted presence in international financial markets, including its widespread use in settlements, reserves, and financial derivatives. Although the euro has made slight gains, it still struggles to challenge the dollar’s dominance.

In contrast, the fluctuations in RMB usage do not fully reflect the reality of its internationalization progress. In May 2025, the total RMB payment amount decreased by 23.07%, while global payment volumes in all currencies also declined by 6.81%. This fluctuation is largely attributed to seasonal factors and market adjustments, rather than a setback in RMB internationalization.

The Limitations of SWIFT Data and the Rise of CIPS

SWIFT, as the largest global cross-border payment messaging system, has limited data coverage. It only accounts for payments processed through its system, while many cross-border transactions bypass SWIFT. For example, China’s export of small commodities from Yiwu or Southeast Asian consumers purchasing Chinese electronic products are often processed via bank wire transfers or third-party payment platforms, which are not included in SWIFT statistics.

More importantly, the RMB Cross-Border Payment System (CIPS), led by China, is rapidly emerging. As of the end of May 2025, CIPS had extended its reach to 120 countries and regions, with 174 direct participants and over 1,500 indirect participants. In 2024 alone, CIPS transaction volume surged by 43% year-on-year, handling RMB 175 trillion. This indicates that an increasing number of cross-border RMB transactions are being conducted through CIPS, which are not reflected in SWIFT statistics. Thus, the fluctuations reflected in SWIFT data are merely the tip of the iceberg, as the actual progress of RMB internationalization is far more complex and significant.

The Underlying Causes of RMB Payment Fluctuations

The decline in RMB payment share can be attributed to multiple factors. First, seasonal factors play a key role in short-term payment data fluctuations. For example, the May Day holiday in China caused some cross-border payments to be settled early in April, leading to a temporary drop in May payment volumes. Historical data shows a similar decline in RMB payment share during the same period in 2024.

Second, while China’s exports to the US fell by 34.4% in May, the impact on RMB payment share was limited because Sino-US trade primarily relies on US dollar settlements. On the other hand, China’s trade with Belt and Road Initiative (BRI) countries continues to grow, with RMB settlement ratios in these regions steadily increasing.

At the 2025 Lujiazui Forum, China's central bank governor, Pan Gongsheng, emphasized that the global payment landscape is undergoing profound changes, with the dominance of a single sovereign currency in cross-border payments gradually giving way to a more diversified payment system. China has established a multi-channel, wide-coverage RMB cross-border payment and clearing network. The emergence of CIPS has become a core driving force in advancing RMB internationalization, with its role as a "highway" for RMB payments becoming increasingly evident.

The Chemical Industry: A Strategic High Ground for RMB Internationalization

As a critical component of global trade, the chemical industry plays a pivotal role in advancing RMB internationalization. Chemical products are characterized by their high added value, technical barriers, and complex supply chains, which make their cross-border payments highly sensitive to efficiency, cost, and stability.

The Inertia and Challenges of Dollar Settlements

Global chemical trade has long depended on dollar settlements, a model that ensures the stability of industrial supply chains. However, this dependency brings significant challenges. For instance, the Federal Reserve’s interest rate hikes tighten dollar liquidity, directly increasing financing costs for chemical exporters. Moreover, the volatility of the dollar exchange rate and uncertainties brought about by Sino-US trade tensions exacerbate risks for chemical companies reliant on dollar settlements.

The Advantages and Opportunities of RMB Settlements

RMB internationalization offers the chemical industry a new pathway to break free from dollar settlement constraints. RMB-settled chemical products gain a price advantage in Belt and Road countries, reducing losses caused by exchange rate fluctuations. More importantly, RMB settlements processed through CIPS are not subject to SWIFT limitations, helping companies circumvent potential international financial sanctions.

For example, RMB settlement ratios have significantly increased in China’s exports of basic chemicals and specialty chemicals to Africa, the Middle East, and Southeast Asia. This shift has improved payment efficiency, shortened cash flow cycles, and enhanced the competitive edge of Chinese companies in these markets.

RMB’s Impact Across Chemical Industry Segments

Basic Chemicals: A New Bargaining Tool for Price Negotiations

Basic chemicals such as ethylene, methanol, and propylene are the backbone of China’s chemical exports, characterized by intense competition and frequent price fluctuations. The adoption of RMB settlements enhances the bargaining power of exporters. For instance, RMB settlements in exports to ASEAN and the Middle East have continuously increased, effectively lowering exchange costs for companies.

Specialty Chemicals: RMB Drives Breakthroughs in High-Value Products

Specialty chemicals, including dyes, pesticides, and pharmaceutical intermediates, are high-value products requiring advanced technology. Their export often demands efficient payment processes and robust financial services. By using RMB settlements, companies can accelerate cash flow and minimize additional costs caused by exchange rate volatility. For example, Chinese pesticide exports to Africa have seen a sharp increase in RMB settlement ratios, improving transaction convenience and strengthening trust between clients and Chinese companies.

Chemical Equipment and Technical Services: Exploring RMB Settlements Across the Value Chain

As China’s chemical technology continues to advance, the export of chemical equipment and technical services has emerged as a new growth area. RMB settlements in this sector not only reduce payment costs but also foster full value chain internationalization. For example, in large-scale chemical park projects in the Middle East, RMB is increasingly used as the primary settlement currency. This shift improves operational efficiency and enhances the global reputation of Chinese enterprises.

Recommendations for Chinese Chemical Trade Practitioners

Seize the Opportunity of RMB Settlement

Chemical trade companies should proactively embrace the RMB settlement trend by collaborating with banks and CIPS service providers to familiarize themselves with cross-border RMB payment processes. Furthermore, they should communicate with overseas clients to encourage greater use of RMB in contracts.

Deepen Presence in Emerging Belt and Road Markets

Belt and Road countries serve as key drivers of RMB internationalization. Chemical trade companies should invest in thorough market research in these regions to identify trade opportunities where RMB settlements can play a strategic role, particularly in Africa, the Middle East, and Southeast Asia.

Enhance Risk Management to Boost Competitiveness

While RMB settlements can reduce exchange rate risks, companies still need to develop comprehensive risk management mechanisms. For instance, hedging tools like foreign exchange options can help mitigate potential currency fluctuations. Additionally, chemical companies should increase R&D investments to elevate product quality and maintain a competitive edge in global markets.

RMB internationalization is akin to a winding yet resolute river—its short-term fluctuations do not obscure the long-term upward trajectory. As CIPS continues to expand its global network, the efficiency and convenience of RMB cross-border payments have been widely validated, providing strong support for breakthroughs in the international chemical industry.

From basic chemicals to specialty products and technical services, RMB settlements are injecting new vitality into the chemical trade sector. Practitioners must seize the historical opportunities brought by RMB internationalization, tap into emerging markets, and optimize product structures to propel China’s chemical industry to new heights on the global stage.

The “invisible power” of RMB is quietly rewriting the global payment landscape, paving the way for a brighter future for China’s chemical industry.