In the latest move to bypass Western-dominated financial systems and step up the internationalisation of the yuan, China is linking its retail payment networks with the United Arab Emirates.
Users will soon be able to use domestic mobile apps to scan QR codes and make payments in either country, under a recent agreement between state-owned Bank of China (BOC), UnionPay International, and the UAE central bank’s subsidiary Al Etihad Payments.
“The partnership would help expand the scope of cross-border renminbi application, contributing strongly to yuan internationalisation,” Dong Junfeng, chairman of China UnionPay, told domestic media outlets on July 15.
For Beijing, building an alternative financial infrastructure is a strategic priority as it seeks to reduce reliance on the US dollar and shield its trade from potential geopolitical shocks.
Beyond the new retail QR link, BOC will act as the exclusive clearing bank for Jaywan, the UAE’s national debit card, handling all yuan-denominated transactions, foreign exchange, and clearing services.
The push comes as the yuan’s global footprint faces near-term headwinds. In May, the renminbi’s share of global payments fell to around 2.75 per cent, ranking sixth globally, according to data compiled by Swift – the main messaging network used by the global banking system.