In its efforts to broaden the BRICS alliance, China is trying to convince African countries to stop using the US currency for international transactions and start using the Chinese yuan instead.
Recent courageous actions have been taken by the BRICS nations—South Africa, Brazil, Russia, India, and China—to fulfill their pledge to become less reliant on the US dollar. With the historic $2 billion copper mega-deal between both developing nations due to be paid in Chinese Yuan, this geopolitical maneuver takes center stage.
In their quest for more financial independence and less exposure to the ups and downs of a single currency, the BRICS countries have decided to move away from the US dollar.
As a member of the BRICS group, China is pushing for African countries to stop using the US currency and start using the Chinese yuan instead. The Bank of China’s Zambian branch is making an effort to increase the flow of Chinese yuan across Southern Africa.
Zambia sends almost $2 billion worth of copper to China every year, both refined and raw. China receives $340 million in refined copper and $1.64 billion in raw copper from the African country.
An important factor in Zambia’s GDP development, is responsible for 70% of the country’s total international export income. As part of its de-dollarization efforts, BRICS member China is urging Zambia to swap US dollars for Chinese yuan when trading copper.
“We will take seriously our obligation and utilize our position in Zambia to assist other African nations in offering comprehensive RMB-related products and services and to encourage the usage of RMB in bilateral trade and economic endeavors.”
The BRICS country has a leg up in the negotiations with Zambia because of its influence over Africa’s supply chain. A major milestone would be reached if Zambia were to accept China’s offer, which would mean that copper transactions worth $2 billion would be settled in Chinese Yuan instead of US dollars.
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