- China and Egypt have agreed to increase trade and investment settlements in their local currencies, moving away from the US dollar.
- Both nations expanded their local currency swap agreement and discussed deepening cooperation in sectors like construction, energy, manufacturing, and agriculture.
- The establishment of the Renminbi (RMB) Clearing Bank of Africa gives African financial institutions direct access to China’s financial system, enabling more yuan-based transactions.
- Chinese investment in Egypt has surpassed $10 billion, reflecting growing investor confidence and the expanding presence of Chinese companies in the country.
The East Asian nation presented this idea to Egypt, one of its largest trading partners in Africa, after the Chinese president, Xi Jinping, made a historic visit to Cairo
In a joint statement, the two heads of state advocated for an increase in trade and investment settlements denominated in their respective national currencies, as seen on Xinhuanet
Additionally, both countries agreed to increase their local currency swap agreement, as
As earlier reported, China’s President arrived in Egypt on Tuesday, his first visit to the Arab world’s most populous nation in a decade
Egyptian President Abdel Fattah al-Sisi welcomed Xi at Cairo International Airport, where they walked a long red carpet flanked by uniformed soldiers, folk dancers, and young Egyptians waving Chinese flags
During the visit, both presidents discussed cooperation across several sectors including construction, energy, manufacturing, and agriculture
Both leaders also witnessed the signing of several memorandums of Understanding between <a href="https://usglobalxpress.com/pac-foundation-trains-36-young-entrepreneurs-in-business-finance-msme/” title=”PAC Foundation Trains 36 Young Entrepreneurs in Business Finance, – MSME”>business entities from both countries
The event, which marked the 70th anniversary of diplomatic relations between Egypt and China, also saw them agree to trade in their local currencies
They released a joint statement disclosing that they had agreed to boost trade in their respective currencies as opposed to the dollar
The BRICS group of nations, which China is a key member of, has long touted the idea of reducing dependence on the U.S. dollar and promoting a more multipolar global financial system
Central to this ambition is the discussion of a potential BRICS currency, part of a broader de-dollarization strategy aimed at replacing the dollar as the dominant medium for international trade and financial transactions
In June, the People’s Bank of China (PBoC) jointly authorised Standard Bank and the Industrial and Commercial Bank of China (ICBC) to operate the Renminbi (RMB) Clearing Bank of Africa, giving businesses and financial institutions across the continent direct access to China’s onshore financial system for the first time
The move effectively gives African financial institutions their first direct gateway into China’s domestic payment and liquidity system, allowing eligible cross-border transactions to be settled directly in yuan rather than routed through the US dollar
The bank processed about $500 million in RMB transactions during its first four months on the platform, underscoring growing demand for yuan-based settlements between Africa and China
A few weeks ago, during a government meeting to boost economic cooperation with China, Egyptian Prime Minister Mostafa Madbouly said that Chinese investment in Egypt had surpassed $10 billion
According to the Egyptian official, the milestone highlights the growing investor confidence in the country’s economic ecosystem and the expanding presence of Chinese businesses in Egypt
Madbouly stated that economic cooperation between both countries has continued to strengthen under both nations’ leadership, supporting Egypt’s development goals while furthering mutual commercial interests
Very recently, both countries began exploring a major economic partnership that could bring up to $2 billion in new investment into the region
This proposed initiative would establish a massive, integrated industrial complex in Egypt’s Suez Canal Economic Zone (SCZONE), a subject that was discussed during Mr.Jinping’s visit
“I take this opportunity to announce the agreement to launch the third phase of expansions of the Egyptian-Chinese industrial zone in the Suez Canal Economic Zone, which launches a new phase of business in key sectors such as renewable energy, automobile manufacturing, textiles and chemical fibres,” Egyptian President Abdel Fattah al-Sisi said at the start of bilateral talks