DUBAI, April 26 (Reuters) – Industrial and Commercial Bank of China has cleared more than 590 billion yuan ($86 billion) in transactions in Qatar in the nearly two years since it opened its clearing centre in the Gulf state, an executive told Reuters.
The move reflects a surge in trade and investment between China and Gulf Arab states in recent years, though most business between the two sides is still conducted in U.S. dollars.
The clearing centre was launched in June 2015 as the Middle East’s first location for clearing transactions in the yuan to promote business ties. A clearing centre can handle all parts of a currency transaction from when a commitment is made until it is settled, reducing costs and time taken for trading.
“ICBC Doha opens the door to China’s onshore RMB (yuan) and foreign exchange markets to local financial institutions, corporates and investors,” Zheng Chunyi, General Manager of ICBC Doha, said in an interview. “Our data shows that Qatar, the United Arab Emirates and Kuwait are the most active Middle East countries using the RMB clearing centre for direct payments with Chinese mainland and Hong Kong.”
Chunyi said trade between Gulf Cooperation Council countries and China had surged more than 600 percent in the past decade, with Chinese investment in the Middle East reaching more than $160 billion between 2005 and 2016.
H/t reader P.A.Semi:
“Need to note, that Qatar recently wanted to deal LNG sales with China in renminbi instead of dollars. Same “offense” as good old Saddam Husein in Iraq…
And Al Jazeera is a thorn in the flank of gulf tyrants…”
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