Yuan takes the helm in Hudong-Zhonghua’s global shipbuilding deals

In China, Global Times reports Hudong-Zhonghua Shipbuilding has secured two major shipbuilding contracts settled in yuan—rather than the traditionally dominant U.S. dollar. These recent agreements, one with COSCO Shipping and another with Canada’s Seaspan Corporation, encompass 12 large 13,600-TEU container vessels, reinforcing the yuan’s emerging role in global shipping.

This shift to yuan-based settlements offers unique advantages in a dollar-centric industry. For Hudong-Zhonghua, these contracts mitigate exposure to dollar exchange rate volatility, protecting profit margins and reducing costs associated with currency conversions. For international clients, paying in yuan streamlines transactions, particularly for those already operating extensively within China, by eliminating currency risks and simplifying logistics.

Yuan-denominated transactions align with China’s broader economic strategy to internationalize its currency and reduce reliance on foreign reserves, enhancing financial resilience. Industry experts suggest this move could inspire similar contracts across other sectors as China looks to establish the yuan as a credible global currency. Veteran shipping analyst Wu Minghua notes that yuan settlements provide a pathway for stronger maritime finance and lending systems within China, enabling Chinese financial institutions to expand credit offerings to the shipping industry in line with rising global demand.

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