China's central bank pledges wider financial market access, yuan push at Bangkok IMF meetings

Why it matters

People's Bank of China Governor Pan Gongsheng said on the sidelines of the International Monetary Fund and World Bank annual meetings in Bangkok that China will continue opening its financial markets and promoting the international use of the yuan, responding to global investors' demand for diversified portfolios. It is the central bank's latest policy signal amid rising trade tensions and market uncertainty.

In a speech on Thursday, Pan cited geopolitical risks, profound changes in the global economic landscape and rapid advances in artificial intelligence as reasons global investors are looking beyond US dollar-denominated assets. "China's steady economic growth and the rapid development of high-tech industries provide solid support for RMB assets," he said.

Planned measures include encouraging wider international acceptance of yuan-denominated bonds as collateral, improving financial connections with overseas markets, expanding offshore yuan trading, and developing more tools to help investors manage financial risks and facilitate cross-border investment. Bloomberg reported that Pan touted yuan assets to investors at a closed-door event in Bangkok, saying a portfolio of 80% yuan bonds and 20% Chinese equities delivered a larger annual return over two decades than a global asset portfolio, with lower volatility.

In a Friday meeting with European Central Bank President Christine Lagarde and European Commissioner for Economy and Productivity Valdis Dombrovskis, Pan said global trade and financial imbalances "are closely linked to the evolution of the global division of labor, inherent contradictions in the international monetary system, and factors such as chronic high fiscal deficits and high consumption in some countries," and cannot be corrected through exchange rate adjustments alone.

IMF Managing Director Kristalina Georgieva called on China to reduce its dependence on exports and strengthen domestic consumption. Pan acknowledged that China needs to shift toward consumer-driven growth.