‘No way’ the yuan challenges the U.S. dollar—though the yen and the pound may have more to fear, says Standard Chartered’s China CEO

Standard Chartered China CEO Jean Lu has downplayed the possibility of the Chinese yuan challenging the U.S. dollar's dominance in global reserves, despite China's efforts to promote its use. Speaking during a media roundtable in Singapore, Lu stated, "There is no way—at least in my career—for the RMB to challenge the USD." However, she suggested that other currencies like the yen and pound may face competition from the yuan.

Beijing's five-year plan aims to boost the yuan's role in international finance through mechanisms like Panda and Dim Sum bonds. The U.S. dollar remains the dominant reserve currency, comprising 57% of global foreign exchange reserves in the first quarter of 2026, according to the IMF, up one percentage point from the previous quarter.

In contrast, the yuan accounts for only 2% of reserves. Lu attributed this to "limited liquidity in offshore markets" and the People's Bank of China's capital controls. The central bank is actively promoting the yuan's internationalization, including recent efforts to establish offshore clearing banks and repo facilities. The yuan is gaining traction in Southeast Asia, with settlement volumes between China and the region surging 50.7% in 2025.

Chinese companies are increasingly investing in the ASEAN region, driven by new infrastructure projects and geopolitical shifts. However, domestic challenges like overcapacity in certain sectors could impact these investments.