China’s central bank governor Pan Gongsheng has pledged to further open the country’s financial markets, adding that yuan assets could support investors seeking greater diversification during a period of trade uncertainty, reported Reuters.

Pan identified geopolitical tensions, changes in the global economic landscape, and the development of AI as factors supporting further progress towards yuan internationalisation.

“China’s steady economic growth and rapid development of high-tech industries provide solid support for RMB assets,” a People’s Bank of China (PBOC) statement quoted Pan as saying in a speech given on the sidelines of the annual meetings of the International Monetary Fund and the World Bank.

The PBOC will also expand risk management tools intended to support investment and financing, according to the statement.

China has been advancing the opening of its capital markets and increasing international use of the yuan as US President Donald Trump’s trade war and unpredictable foreign policies have reduced confidence in dollar assets, the report noted.

The news agency also reported increased volatility across global financial markets. Investors have been questioning whether companies making large investments in AI can deliver sufficient earnings growth while borrowing costs remain elevated.

Pan said the PBOC would work to increase the international acceptance and use of yuan bonds as eligible collateral.

It would also improve links between cross-border financial infrastructure and support the development of offshore yuan markets.

In March, Reuters reported that Chinese regulators are reviewing whether restrictions on major investors’ ownership stakes in commercial banks should be eased.

Regulations introduced in 2018 currently prevent a single investor from becoming a major shareholder, defined as holding at least 5%, in more than two commercial banks. The rules also prevent an investor from holding a controlling stake in more than one bank.