Shannon Brandao
Shannon's excerpt from the article: "East Asia Forum [excerpt]: #China’s pursuit of internationalising the #yuan, #currency swaps, e-currency, cross-border deals and digitalised currency have recently made #international news. These efforts are mainly on the rise with Gulf states.
On 28 November 2023, the People’s Bank of China and the Central Bank of the #UnitedArabEmirates renewed their currency swap agreement worth US$4.89 billion for five years. Both banks also signed a memorandum of understanding to enhance collaboration in #digitalcurrency development.
Meanwhile, the Dubai Financial Market, in collaboration with Nasdaq Dubai and the Shanghai Stock Exchange, signed a memorandum of understanding covering various areas of digital financial cooperation. China–#UAE currency swap started in 2012, and in March 2023, the two sides made the first-ever purchase of #liquifiednaturalgas in yuan.
On 20 November 2023, the People’s Bank of China and the Saudi Arabian Monetary Authority signed a currency swap of US$6.98 billion for three years. In a separate development, Saudi companies were listed on the Hong Kong Stock Exchange. #SaudiArabia is in active talks with Beijing to price some of its oil sales in Chinese yuan, a move that would dent the US dollar’s dominance in the global petroleum market and mark another shift by the world’s top crude exporter towards Asia.
China also has a currency swap agreement with #Qatar. In addition to currency swaps, China has signed cross-border trade settlement arrangements with all six members of the Gulf Cooperation Council and has established yuan clearing centres in different cities. These measures could make the yuan a #trade invoicing currency, reduce cumbersome processes and costs and create a pool of liquidity in the yuan.
The growing financial cooperation between China and Gulf Cooperation Council states is not unexpected. It is the result of steady, systematic growth over a decade and confirms deepening bilateral relations. Both sides have placed a significant premium on the digitalisation of their finances. They are taking measures to create greater space and avoid US sanctions. The Gulf region, especially the United Arab Emirates, has positioned itself as a global financial hub and is drawing investments towards it. Saudi Arabia is also striving to catch up quickly."
#news #business #geopolitics