the progress of China in it International Trade is wreaking havoc. The old model of exchange between countries seems to change due to the influence of the Asian giant, such as the recent agreement signed with Brazil, where the yuan and the real will be exchange currency for operations to the detriment of the dollar.
The leaps of Chinese trade globally are leaving with each passing day, with less room for maneuver (and subsistence space) to the american currencywhich was the “referee” trade between countries for much of the 20th century.
China deepens strategic ties with Brazil
The recent agreement you signed Brazil, adds the South American nation to the list of countries that prefer to use the Chinese yuan for foreign trade. Both nations will trade directly between the Brazilian real and the Chinese yuan, leaving out the US dollar.
The alliance was sealed during the Brazil-China Economic Seminar held in Beijing last Wednesday. During the activity, more than 500 businessmen from both nations participated, belonging to 30 strategic sectors of the two nations.
Among the many framework agreements that were signedthe agreement that is gaining strength the most is the accession of the Brazilian bank bbm to the interbank payment system China (China Interbank Payment System, CIPS).
What will the China-Brazil link be like?
This is an alternative to the payment system SWIFT. This system, whose headquarters are in Belgium, connects 11,000 banks in more than 200 countries around the world. Despite their independence, countries like Iran and Russia have been excluded after receiving financial sanctions from United States and Europe.
Added to this neuralgic agreement for the trade of the neighboring country, was added the creation of a Clearing House without the intermediation of the US dollar. The person in charge of operating as a yuan clearing bank will be the Industrial and Commercial Bank of China (ICBC)which has a headquarters in the South American nation.
The battery of negotiations and their consequent results in trade agreements is based on China’s relationship with the region, taking into account that said country is Brazil’s largest trading partner.
The fact that both countries are advancing in this direction, with trade without the US dollar as the currency of exchange, highlights the task that the former president of Brazil, Dilma Rousseffcomes leading to the front of the New Development Bank (NDB), better known as the BRICS bank. From there it will promote trade with currencies other than the dollar.
The yuan stealthily displaces the dollar
The case of Brazil is not the only one, since China continues to advance and deepen other strategic business alliances. Saudi Arabia, Russia, India and Pakistan, among others, are part of that network where the country governed by Xi Jinping it has been forging economic alliances, but also in other sensitive areas such as politics, security and trade.
Thus, China is increasing its efforts day by day to break the monopoly of the dollar as the only currency of exchange, one more step in what some specialists consider the end of Joe Biden’s country’s hegemony on the globe.
Source: Ambito
