Global companies are making a beeline for China's debt markets, issuing record amounts of yuan-denominated bonds and borrowing heavily from mainland banks, capitalizing on the very low yuan interest rates. Companies and banks are raising record amounts of cash through yuan bonds issued in mainland China and in Hong Kong.

This surge in borrowing has vaulted the yuan past the euro into becoming the second-biggest currency used in global trade finance. Strangely, according to Fiona Lim, senior FX strategist at Maybank, the global scramble to borrow from China is counterintuitive, coming as international investors are shunning the world's second-biggest economy out of concerns about geopolitical tensions and weak growth.