Signal Yuan settlement and Chinese capital rise in Korea's trade and capital markets

Summary

As part of its internationalisation strategy, China has pushed yuan settlement in its trade, and the yuan's share of Korea-China trade settlement rose from 5.51 percent in 2018 to 12.31 percent in 2024. For Korean imports from China, the share climbed from 4.2 percent to 13.7 percent, reaching 14.6 percent, or 14.1 billion dollars, in the first half of 2025. Chinese capital's share of Korea's capital markets is also rising. Holdings of Korean equities by Chinese investors, including those in Hong Kong, grew from 21.1 trillion won at the end of 2022 to 35.1 trillion won in June 2025, an average annual increase of 19.2 percent. Their share of total foreign equity holdings rose from 3.7 percent to 4.1 percent.