BRICS revolution: UAE and China announce groundbreaking trade shift using local currencies
The United Arab Emirates and China are embarking on a significant trade shift that could reshape the global economic landscape. Both countries are intensifying their cooperation to bolster their presence in the Pacific Islands and Africa through bilateral investments and trade. In a groundbreaking move, trade between the UAE and China will be conducted in Chinese yuan, positioning the Middle Eastern nations to provide China with a gateway of influence in the region. This move has the potential to rebalance the global power dynamic away from Western dominance.
This development comes at a time when the BRICS alliance, comprising Brazil, Russia, India, China, and South Africa, has gained significant traction in the geopolitical arena. The alliance has been actively pursuing de-dollarization plans, aimed at reducing the dominance of the US dollar in global transactions. Moreover, the BRICS alliance recently welcomed the UAE, along with Saudi Arabia, Iran, Egypt, and Ethiopia, as new members, signaling their collective resolve to expand their presence in Africa. The UAE, specifically, is set to diversify its currency usage by incorporating the yuan.
The increased use of local currencies in bilateral trade between China and the UAE will further support the overall mission of the BRICS alliance. The alliance has been vocal about its de-dollarization aspirations throughout the year, and this move brings them a step closer to achieving their goal of multiplicity in global currencies.
However, the de-dollarization efforts face challenges as the US dollar continues to maintain its strength and dominance in the global market. Nevertheless, the alliance remains steadfast in its commitment to reduce the influence of the US dollar through strategic investments and financial cooperation.
The success of de-dollarization efforts will depend on the adoption and acceptance of digital currencies, such as China’s digital yuan, in local and international trade. As these digital currencies gain traction, the strength of the US dollar may diminish, potentially favoring the currencies developed by the BRICS alliance. The year ahead will shed more light on the possibility of a shift in power from the US dollar in favor of BRICS currencies.
Overall, the announcement of increased trade between the UAE and China using local currencies marks a significant milestone in the BRICS revolution. It not only strengthens the economic ties between the two countries but also sets the stage for the BRICS alliance to assert itself as a formidable player in the global economy.