China’s Yuan Is Quietly Gaining Ground

Chinese assets have had a terrible year—but China’s currency is gaining ground as an international payments option.

The yuan’s status as a global currency still faces a huge obstacle in the form of China’s own capital controls. Even so, rising willingness to conduct trade in yuan could help insulate China’s economy, at least to an extent, in the event sanctions were imposed in a hypothetical future conflict with the West. It also could become a source of structural support for the yuan itself, even assuming weaker-than-expected Chinese growth in the years to come.