US Treasury Secretary Bessent has stated that China's currency is non-convertible, highlighting challenges for China's ambition to establish its currency as a global standard. This assessment raises concerns about the flexibility and international acceptance of the Chinese currency. Meanwhile, Chinese companies are reportedly holding on to foreign currency deposits amid trade uncertainties. The appeal of a previously popular trade that attracted foreign funds to Chinese onshore bonds is diminishing due to rising currency hedging costs and increasing US yields, which heightens the risk of extended capital outflows. In response, China's central bank has stepped up short-term cash injections into the banking system, reaching 1.3 trillion yuan this week—the highest level since January—to bolster financial stability.