China's cross-border euro settlements reached €187 billion in 2025, marking the largest annual increase since 2010 and reflecting a sharp rise in trade with the European Union. The growth underscores shifting global payment dynamics and deepening economic integration.
- China's euro settlements reached €187 billion in 2025, up 42% from 2024.
- China-EU trade volume surged 38% in 2025, driven by green tech exports.
- Euro became the second most used currency in China’s foreign trade settlements.
- Euro liquidity in China’s offshore market rose to €24 billion by end-2025.
- Deutsche Bank and BNP Paribas expanded euro settlement operations in China.
- U.S. dollar share in Chinese trade settlements declined slightly in 2025.
China’s euro-denominated trade settlements climbed to €187 billion in 2025, a 42% year-on-year increase and the highest rise since 2010, according to data from China’s central bank and clearing institutions. This surge coincides with a 38% jump in China-EU goods trade volume, driven by increased exports of electric vehicles, solar panels, and battery components to the bloc. The uptick marks a significant shift in trade finance patterns, with the euro overtaking the U.S. dollar as the second most used currency in China’s foreign trade settlements for the first time in over a decade. The rise in euro settlements reflects broader de-dollarization trends and the EU’s expansion of green technology supply chains with Asian partners. German automakers, French battery producers, and Italian industrial firms accounted for over 60% of the new euro trade volume with China. In parallel, Chinese exporters have increasingly adopted euro invoicing to reduce currency risk and streamline cross-border operations, especially in markets where dollar volatility has disrupted supply chains. Financial institutions in Shanghai, Shenzhen, and Beijing reported a 55% increase in euro clearing requests through the China Foreign Exchange Trade System (CFETS) and the Shanghai International Financial Center. Meanwhile, euro liquidity in China’s offshore market grew to €24 billion, up from €13 billion at the start of 2024. These developments signal growing confidence in the euro as a stable, non-dollar alternative in high-volume trade corridors. The shift impacts global financial markets, with euro-based clearing houses and European banks experiencing higher transaction volumes. Frankfurt-based Deutsche Bank and Paris-based BNP Paribas have expanded their China euro settlement desks, while U.S. dollar-based corridors saw marginal declines in Chinese trade activity. The trend may accelerate as more Chinese firms enter long-term supply contracts with EU partners using euro pricing.