The Renminbi's Creeping Internationalisation (II): The Petro-Yuan And The Role Of Gold

If Saudi Arabia decides to trade oil with China in renminbi, it would add momentum to the ‘petro-yuan’ trading already happening between China and Russia. More players choosing to trade oil and other products with China in renminbi could help yuan trading reach critical mass over time. Gold is a key element for building up the petro-yuan system. A gold-backed petro-yuan does not require full renminbi convertibility to function, so it allows China to simultaneously retain control of the capital account and boost the internationalisation of the renminbi