{
  "id": 13015472,
  "title": "Can China use widening yield gap between the US dollar and yuan to boost global role?",
  "url": "https://urgent.news/2026/10/09/can-china-use-widening-yield-gap-between-the-us-dollar-and-yuan-to-13015472",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-09T03:00:07.000Z",
  "source": {
    "name": "SCMP Business",
    "slug": "scmp-business",
    "url": "https://www.scmp.com/business/banking-finance/article/3370252/can-china-use-widening-yield-gap-between-us-dollar-and-yuan-boost-global-role"
  },
  "original_language": "en",
  "account": "China stands to benefit from the growing yield gap between the US dollar and yuan, according to a researcher from a Beijing-based governmental think tank. This widening gap, currently around 3.5 percentage points, offers a chance for the yuan to gain global traction by bolstering financing, hedging, and asset-absorption systems, argues Jiang Zhenlong. The higher US yields make yuan assets less attractive, exerting pressure on the exchange rate and capital flows, yet also increase financing costs. Jiang argues that this inversion presents an asymmetrical effect, providing a financing benefit while creating a pressure on the asset allocation side. Although yuan bond fundraising has reached a record level of 1 trillion yuan, it does not necessarily signify a growing appetite to hold yuan assets. China's financial market still struggles to absorb and retain global capital. The researcher warns that the wider gap may stimulate carry trades, which could lead to persistent selling pressure on the currency. However, the yuan has remained relatively stable at about 6.7 per dollar. To capitalize on the widening yield gap, Jiang suggests measures such as linking yuan borrowing to real trade and investment, improving offshore liquidity during stress, broadening hedging tools, and monitoring the use of borrowed yuan to distinguish true financing from carry trades. Hong Kong, the primary site for offshore yuan bond sales, has been enhancing its tools, with the launch of the first five-year Chinese government bond futures by Hong Kong Exchanges and Clearing on August 3. Authorities are also exploring a seven-day offshore yuan liquidity tendering mechanism to expand banks' access to short-term funding. Jiang emphasizes that the yuan's low-interest-rate advantages can only become a long-term driver of internationalization if they are embedded in real economy and trade activity, and improving the liquidity, convenience, and collateral functions of yuan assets is more crucial than merely chasing yield levels.",
  "summary": "China should seize a window opened by the widening US-China yield gap to strengthen the financing, hedging and asset-absorption systems behind the yuan, turning its cyclical low-interest-rate advantage into lasting global use of the currency, according to a researcher from a Beijing-based governmental think tank. The 10-year US Treasury yield was 5.22 per cent on Thursday, compared with 1.69 per…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 3,
    "also_reported_by": [
      {
        "outlet": "South China Morning Post",
        "title": "Can China use widening yield gap between the US dollar and yuan to boost global role?",
        "url": "https://urgent.news/2026/10/09/can-china-use-widening-yield-gap-between-the-us-dollar-and-yuan-to",
        "published": "2026-10-09T03:00:07.000Z"
      },
      {
        "outlet": "The Business Times - Companies & Markets",
        "title": "China emerges as source of cheap global funding as Beijing lets more yuan flow offshore",
        "url": "https://urgent.news/2026/10/09/china-emerges-as-source-of-cheap-global-funding-as-beijing-lets-more",
        "published": "2026-10-09T05:14:04.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}