In a telling info-graphic from the Korea Herald, they point to the high interest rates that RMB deposits are paying thus creating a higher demand for holding accounts denominated in renminbi rather than low interest paying currencies such as the dollar.
In South Korea, renminbi deposits amounted to $16.2 billion according to the central bank, accounting for almost 26% of the total foreign currency deposits as of the end of July. The portion of dollar deposits fell to 64.5%, down 4.5% from the previous month and down 18.6% from the same period last year, while the total amount of foreign deposits hit a record $62.5 billion.
Economic ties between South Korea and China are strengthening with the announcement last month that Korea and China plan to establish direct trading between the won and the yuan. Furthermore, officials believe Chinese President Xi Jinping will grant Korea the Renminbi Qualified Foreign Institutional Investor (RQFII) status, which allows unprecedented access to Chinese onshore equity and fixed income securities markets.