General

According to US media reports, the recent series of actions to settle in RMB is indeed moving towards China's vision. This vision is to lead a global economic order that is not affected by fluctuations in the US dollar and Western sanctions.

Newsan Home Appliances is one of the largest home appliance retailers in Argentina, with most of its products imported from China. Previously, it mainly used the US dollar, an international trade settlement currency, to purchase refrigerators, televisions, and components.

But last month, the company began a new attempt: to settle transactions in Chinese yuan. This is part of an effort aimed at alleviating pressure on the Argentine economy, which lacks the US dollar.

The Chinese yuan is becoming increasingly important as a currency for international trade settlement, "said Louis Gali, the CEO of the company

According to the report, as the Argentine economy once again enters crisis and the supply of US dollars continues to decrease, the Argentine government announced in April that it will pay approximately $1 billion worth of goods imported from China through international trade in Chinese yuan, as well as approximately $790 million worth of goods imported from China every month thereafter.

In addition, Argentina has expanded its currency swap agreements to allow it to borrow renminbi from its second largest trading partner, China.

The report states that this is good news for Beijing. For a long time, Beijing has hoped that the renminbi will be more widely used and gain some of the prestige that the United States previously enjoyed with the global dominance of the US dollar. However, until recently, the luck in this area was not very good.

The report said that suddenly, more customers are willing to settle in RMB, which is due to varying degrees of internal economic crises in various countries, Western sanctions against Russia, China's position as a major lender, and growing concerns about being constrained by Washington's policies.

In Buenos Aires, international trade importers accepted this change. Customs broker Ruben Guidoni said, "Nowadays, everyone is rushing to buy imported goods in Chinese yuan

Orders settled in RMB were quickly approved by relevant Argentine authorities. Alejandra Conconi, the head of the Argentine China Chamber of Commerce for Production, Industry, and Trade, said that more than half of the computers, textiles, mobile phones, and motorcycle parts imported by Argentine companies from China are now paid in RMB.

The report also stated that recently, Brazilian authorities announced that companies can settle trade in RMB; A French company has accepted payment for 65000 tons of liquefied natural gas in RMB; The Chinese yuan has become the currency with the highest monthly trading volume on the Moscow Stock Exchange.

Economists both inside and outside China believe that this does not mean that the renminbi will soon replace the US dollar, as it will require more countries to use the renminbi to settle large amounts of international trade that does not involve China.

The report states that the widespread use of the US dollar makes it difficult to replace it, but the recent series of actions to settle in RMB is indeed moving towards China's vision. This vision is to lead a global economic order that is not affected by fluctuations in the US dollar and Western sanctions.

Against the backdrop of deteriorating tensions between Moscow and Washington, this effort is becoming increasingly urgent.

The report suggests that even a small increase in the international circulation of the renminbi provides support for the view that China's currency can not only serve as a defense against Western sanctions, but also as a defense against fluctuations in the US dollar.

After Western sanctions against Russia, countries with strong trade relations with Russia such as Brazil began to approach their dependence on the US dollar with caution. Last month, Brazilian President Lula called on more large developing economies to abandon the US dollar.

Since the West turned the widespread use of the US dollar into a weapon and imposed an unprecedented series of sanctions on Russian entities, this view has begun to gain more support.

Clearly, not only China and Russia, but also many other countries are becoming more interested in finding alternatives to the US dollar payment system because everyone has seen how the United States has weaponized the US dollar, "said Arthur Krob, research leader at consulting firm Longzhou Economic Information