A staff member presents banknotes and coins included in the 2019 edition of the fifth series of the renminbi at a branch of the Industrial and Commercial Bank of China in Beijing, capital of China, Aug. 30, 2019. (Xinhua/ Chen Yehua)
A clearing center for Chinese currency renminbi, or yuan, to be launched soon in Mauritius, will facilitate commercial transactions between Mauritius and China and strengthen economic ties between Africa and China, a business leader says to Xinhua in an interview.
PORT LOUIS, Sept. 10 (Xinhua) — A clearinghouse for Chinese currency renminbi (RMB), or yuan, in Mauritius will facilitate commercial transactions between Mauritius and China and help strengthen economic ties between Africa and China, a business leader told Xinhua in a recent interview.
Mauritius Finance Minister Renganaden Padayachy, during his presentation of the 2022-2023 budget in June, said that a regional renminbi clearing center should be set up in Mauritius by the end of the year.
Kwang Poon, president of the Economic Council for Africa Europe Asia (CECOAFREA), an association bringing together businessmen and promoting trade, said the center will allow direct payment of import and export invoices using currencies of both countries.
“Today, if you import from China, invoices are usually in USD and not RMB. Similarly, if you export to China, you invoice in USD or EUR, but not in Mauritian Rupees (MUR). With the RMB Settlement Center as soon as they go live, these cross-border transfers could be done without using any intermediary currency,” said Kwang Poon.
To achieve this, the two countries must first sign an exchange agreement based on the volume concerned. Then, a pilot project can be launched to implement the cross-border interbank payment system, also known as China’s international payment system, he said.
Kwang Poon said that for Mauritius, which positions itself as the international financial center of the African region, the RMB Settlement Center is a step towards consolidating and diversifying the financial services offered by streamlining cross-border transfers which will become faster and cheaper. .
The expert pointed out that in addition to facilitating business transactions between Mauritius and China, the center will also have a positive impact on economic relations between Africa and China, which has seen bilateral trade exceed $254 billion. Americans in 2021, up 35.3% year-on-year.
Therefore, the RMB Settlement Center will truly deliver on its promise if it has a regional reach by expanding into the African continent, he said.
Mauritius is well placed to play the role of intermediary between Africa and China, said Kwang Poon, because following the 22nd meeting of the Eastern and Southern Africa Anti-Money Laundering Group, which ended on September 1, Mauritius is now recognized as one of the few international financial centers compliant or largely compliant with all 40 recommendations of the Financial Action Task Force.
“If we look further and integrate fintech and cryptocurrency on this platform in the future, it will make trading even easier,” he said. “With the rise of China, from 2016, the Chinese yuan joined the US dollar, the European Union euro, the Japanese yen, the pound sterling in the basket of currencies composing the drawing rights Special Funds of the International Monetary Fund.”
“This underlines the importance of China’s place in international trade. This trend will continue to grow, and China intends to promote the internationalization of its currency, the RMB,” he said. ■