South Africa Has Emerged as an Ally in Asian Nation’s Efforts to Bolster Yuan’s Role in Global Trade
By PATRICK MCGROARTY in Johannesburg and ALEXANDRA FLETCHER in London
As China seeks to spread use of the yuan beyond its borders, South Africa has its back.
An increasing number of transactions between the two countries are being settled by directly exchanging rand for yuan. Until about two years ago, almost all trades would have used the U.S. dollar as an intermediary. Now almost 10% of payments are made directly, according to the Society for Worldwide Interbank Financial Telecommunication, or Swift.
China has targeted other countries, including Japan, in its push to bolster the yuan’s role in global trade. So far, though, South African companies have been among the quickest to respond. Banks in the region are making it increasingly easy, and sometimes cheaper, to exchange rand for yuan, also called the renminbi. Because China is South Africa’s largest trading partner after the European Union, that is becoming particularly attractive to the African nation’s corporations.