While the yuan's global currency status may be gaining traction, top CEOs perceive more obstacles to overcome.

• To increase the global use of China's yuan, more "applications" like stocks and bonds are needed, Bonnie Chan, CEO of Hong Kong Exchanges and Clearing Limited, stated on a panel on Tuesday.
• "We won't simply store a large amount of RMB in our bank account," she stated.
• Despite increased statements from Beijing, Fred Hu, founder, chairman, and CEO of Primavera Capital, said on the same panel Tuesday that the internationalization of the yuan is probably going to take longer than many expect.

To increase the global use of China's currency, more "applications" are needed, such as for stocks and bonds, Bonnie Chan, CEO of Hong Kong Exchanges and Clearing Limited, stated on a panel on Tuesday.

Beijing has long aimed to increase the global use of the Chinese yuan, also known as the "renminbi" or "RMB," in an international financial market where the U.S. dollar is the dominant currency. The U.S. sanctions on Russia have also increased the pressure on some countries to have alternatives to the greenback.

During the "Summer Davos" meeting in Dalian, China, Chan stated that people use currency for trading and, most importantly, as a means of storing wealth.

""Instead of simply hoarding RMB and depositing it into a bank account, you want to invest in bonds, equities, and other assets," she stated."

""Our strategic imperative has been altered to ensure we continue to produce more RMB-denominated security products, allowing investors worldwide to witness more RMB applications and utilize it as a medium for storing wealth," Chan stated."

The HKEX introduced a "Dual-Counter" program enabling investors to trade Hong Kong-listed securities in either Hong Kong dollars or Chinese yuan.

In 2015, the International Monetary Fund declared that it would include the yuan in its basket of reserve currencies starting the following year, marking a significant step toward the internationalization of the yuan.

In May, the yuan was the fourth-most active currency for global payments by value, accounting for nearly 4.5% of such transactions, while the U.S. dollar had a nearly 48% share, according to SWIFT.

In May, the yuan ranked third in trade finance with a 5.1% share, while the euro was slightly higher at 5.6%. The U.S. dollar continued to dominate with a nearly 85% share, according to SWIFT data.

Despite an increased number of statements from Beijing, Fred Hu, founder, chairman, and CEO of Primavera Capital, stated on the same panel on Tuesday that the internationalization of the yuan is likely to take longer than many anticipate.

Although China is the world's largest trading nation and has significant financial centers, Hu acknowledged that the country is not as large or deep as the United States. Additionally, China's capital account is not fully convertible, which hinders the internationalization of the renminbi.

A maturing financial market

To increase the variety of Chinese yuan-denominated investment products, the local financial sector must evolve and have a more refined investor base.

Nearly every conversation with top leaders at the annual Lujiazui Financial Forum in Shanghai last week revolved around the concept of "patient investing."

Official releases have promoted long-term investing over short-term speculation with the emergence of a new phrase.

Kenny Lam, CEO of Two Sigma Asia-Pacific, stated during a panel on Tuesday that patience is developed through market volatility.

Policymakers have been focusing on creating more stable and consistent policies, as stated by him.

Waiting for more Chinese IPOs

The pursuit of tapping U.S. financial markets by Chinese companies for prestige and greater market liquidity has been slowed significantly due to increased regulatory scrutiny from both Beijing and Washington, D.C., over the past three years.

According to Jonathan Krane, CEO of KraneShares, IPOs are crucial for drawing investors back into the market, as the narrative surrounding them highlights significant advancements.

"Krane stated that in the US, there is a lot of innovation in AI and successful companies going public, while in China, the same industry and innovations occur, but their stories should be shared through the IPO market, which is expected to revive."

Hong Kong's initial public offerings received support from Chinese authorities last week.

The Hong Kong exchange has received 73 new listing applications this year, which is a 50% increase compared to the second half of last year, according to Chan. She stated that about 110 IPOs are in the pipeline. "All we need is a set of good market conditions for these things to launch and price nicely," she added.