Business

Strong China-Africa trade to influence renminbi

CYNTHIA MWALE, Lusaka
THE future of Chinese-African economic relations will see Africa leverage the renminbi as a global reserve and trading currency, Standard Bank has predicted.
Standard Bank, which trades in Zambia as Stanbic, says the rise of China as a global economic power has transformed Africa with trade volumes of about US$150 billion.
This is contained in a statement issued recently by Stanbic public relations and communications manager Chanda Katongo.
“Chinese domestic consumption has transformed Africa’s economies, urbanised its populations, increased employment, and improved health and skills. It has also seen the emergence of a growing and increasingly entrepreneurial middle class across the continent. The expansion and consumption of this middle class is set to sustain Africa’s growth narrative for generations to come.
“The most convincing evidence of this is in the trade figures. In 2015 total trade between Africa and China reached US$149.8 billion, up from US$28.8 billion 10 years earlier,” the statement notes.
China is working to restructure its domestic economy – away from commodity consumption-driven infrastructural and industrial development, towards a more mixed, skills-intensive economy, exporting services and technology mainly to Africa due to the industrial production that fuelled that country’s rise as a global economic force.
Commenting on the development, Standard Bank head of global markets flow sales Rob Porter said, “Standard Bank’s partnership with the Industrial and Commercial Bank of China, China’s largest bank, is critical to the future of both Africa and China, especially since Standard Bank is able to support Chinese trade and investment into Africa in renminbi.”
United States (US) dollar flows from Africa to China amounted to US$200 billion in 2015 alone.
Mr Porter said, “Converting these US dollar flows to renminbi – and then adding them to our already impressive trade volumes – will establish Standard Bank as the dominant foreign currency provider on the continent.”

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