On October 27, China announced direct trading between the yuan and Singapore dollar beginning October 28. With direct trading of their currencies, both China and Singapore will be less dependent on the U.S. dollar to settle bilateral trade and investment deals.

On October 21, Britain's first sovereign bond in Chinese renminbi was listed on the London Stock Exchange for secondary market trading. Britain became the very first Western country to issue a government bond denominated in renminbi.

Prior to that, on October 14, the British Treasury carried out its debut issuance of renminbi bonds, with a total worth of 3 billion yuan ($490 million) and a maturity period of three years. Strong demand pushed up orders to 5.8 billion yuan ($950 million), lowering the yield to 2.7 percent from a targeted 2.9 percent.

A promising future

Chinese Ambassador to Britain Liu Xiaoming said the occasion had turned a new chapter in the story of the yuan's internationalization as a reserve currency, and would further bolster China-UK economic cooperation.

Andrea Leadson, Economic Secretary to the British Treasury, said the move would renew London's status as a global financial center and major offshore renminbi hub, and encourage other countries to develop renminbi bond markets.

Over the past five years, the internationalization of the yuan has notched up a number of achievements.

According to the People's Bank of China (PBC), China's central bank, yuan settlement in cross-border trade totaled 4.8 trillion yuan ($785.4 billion) in the first three quarters of 2014, making the currency the world's second most popular for cross-border payments.

China has also promoted the expansion of currency swap agreements and direct trading between its yuan and other currencies as well as the establishment of offshore yuan hubs.

On October 9, the PBC signed a currency swap agreement with the Russian central bank worth 150 billion yuan ($24.4 billion). To date, China has signed similar agreements worth a total of 2.9 trillion yuan ($472 billion) with 26 overseas monetary authorities, according to the PBC.

The PBC has also authorized offshore renminbi clearing and settlement arrangements in Singapore, London, Frankfurt, Seoul, Paris and Luxembourg, as well as regions such as Taiwan, Hong Kong and Macao.

By now, the renminbi has established direct trading with U.S. dollar, the euro, the British pound, the Japanese yen, the Australian dollar, the New Zealand dollar, the Malaysian ringgit, the Russian ruble and the Singapore dollar.

Hu Xiaolian, Vice Governor of the PBC, said the yuan has become the seventh largest reserve currency in the world.

"The rapid development of cross-border renminbi business has been fundamentally driven by surging market demand," Hu said. "As the Chinese economy takes part in economic globalization, companies have developed a strong desire to use the renminbi for cross-border trade settlement in order to avert risks and lower costs. This will lead financial institutions, both Chinese and overseas, to provide more customized renminbi-denominated financial services."