BRI promotes yuan internationalization despite trade war
The
internationalization of the yuan keeps improving along with the promotion of
the China-proposed Belt and Road
Initiative (BRI), which shows that confidence in China’s economy is growing
despite the ongoing China-US trade war, analysts said.
“Chinese
financial institutions have established more than 10 subsidiaries in Africa,
and eight countries including South Africa have included the yuan in their
foreign reserves,” Vice Commerce Minister Qian Keming told a press conference
on June 4.
China
has established yuan settlement arrangements with Zambia, and local currency
swap agreements with four countries including Morocco, Qian said.
De-dollarizing
has become a trend, analysts said. Given decades of cooperation, China has won
Africa’s trust, so it is reasonable for these countries to choose to include
the yuan in their foreign reserves, Dong Dengxin, director of the Financial
Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Tuesday, June 4.
Yuan
internationalization will proceed faster due to US unilateralism and bullying. “US
protectionism and its so-called ‘America First’ policy have put the world’s
economy under a threat, no matter whether it’s the European developed
countries, or other developing countries,” he said.
In
contrast, as the world’s second-largest economy, China’s unswerving opening-up
policy and years of high-quality economic growth have offered a secure shelter
for the rest of the world, and including the yuan in foreign reserves shows
countries’ trust in China, Dong noted.
“The BRI
has been a great platform for the yuan’s internationalization thanks to massive
trade settlements that are involved for the currency,” Tan Xiaofen, deputy head
at the School of Finance at the Central University of Finance and Economics,
told the Global Times.
More
than 60 foreign central banks or monetary authorities have included the yuan in
their official foreign reserves, including Singapore, Russia and Australia,
media reports said.
According
to Czech media on May 30, the Czech Republic’s central bank confirmed that it
has decided to adopt the yuan as a reserve currency.
Qian said
that new business models have been developing rapidly under the framework of
the BRI, such as cross-border e-commerce. For example, Chinese e-commerce giant
Alibaba has announced the joint development with the Rwandan government of the
first global e-commerce platform in Africa.
Trade
between China and Africa reached $204.2 billion in 2018, up 20 percent
year-on-year, and China has been the largest trading partner of Africa for 10
consecutive years, Qian told the press conference.
Source:Global Times
On May 17, 2019, the pavilion
with the theme of “The Belt and Road” at the 15th International Cultural Industry
Fair attracted much attention and attracted 50 countries and regions from
Europe, Asia, Africa, North America, South America and Oceania. (Photo by He
Wuchang from People’s Daily Online)
BRI promotes yuan internationalization despite trade war
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