China Pushes Southeast Asia Payments Beyond the Dollar

China and Indonesia have launched a new cross-border QR payment system, marking the latest step in Beijing’s drive to build a regional digital payments network as it pushes to internationalise the yuan and reduce dependence on the US dollar.

Users can now use domestic mobile appssuch as China’s Alipay and Indonesia’s QRISto scan QR codes and make retail payments in either country using their home currencies.

Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at French investment bank Natixis, said the move was a practical step towards deeper financial ties that would reduce transaction costs and currency risks for both sides.“For Beijing, the primary drivers appear to be advancing dedollarisation efforts, promoting the international use of the yuan and strengthening economic integration with key Asean partners amid broader geopolitical pushes for financial autonomy,” she said.

Indonesia’s central bank announced the launch of the initiative on Thursday, according to reports by local news outlet The Jakarta Globe and Chinese state-run news agency Xinhua. It comes as Beijing has stepped up financial connectivity across Asean, its largest trading partner in bloc terms, in recent months.

In Thailand, Chinese visitors have been able to use domestic digital wallets to pay local merchants in yuan since late October. Visitors to Vietnam have been able to pay through UnionPay since December, with the initiative expanded last month to include Alipay. 

Similar services are in place in Malaysia and Singapore.Garcia-Herrero said Beijing was likely to introduce similar arrangements with more members of the Association of Southeast Asian Nations and other partners this year, as it continues to extend its digital and financial footprint.

China’s push for cross-border payments aligns with its broader goal of yuan internationalisationseen as crucial to reducing reliance on US dollar-dominated channels amid rising bilateral tensions with Washington and concerns over the weaponisation of the American currency.

Also central to Beijing’s strategy is the Cross-border Interbank Payment System (CIPS), its alternative to Western-led financial networks.

Garcia-Herrero, who expects global yuan payments growth to remain robust this year, said an increasing number of overseas banks were now direct participants in CIPS, boosting connectivity and settlement efficiency.

On Sunday, Zhu Hexin, deputy governor of the People’s Bank of China, met central bank leaders from Asean, Japan and South Korea in Uzbekistan to discuss regional cross-border payment cooperation.One crucial goal of these initiatives is to encourage spending by foreign visitors to China, where domestic, mobile-first payment systems have long been a barrier for international tourists.

Tourism between China and Southeast Asia surged last year, supported by visa-free travel policies and simplified entry requirements.

Indonesia recorded 1.34 million Chinese visitors in 2025its highest total in six years – accounting for 8.7 per cent of all international arrivals and making China its fourth-largest source of tourists.China also ranked as the fourth-most popular travel destination for Indonesians last year, accounting for nearly 6.8 per cent of the country’s total outbound departures.