Importance of Silk Road for UAE & China

12 Dec 2018

The first Chinese President Xi Jinping visited the UAE after 29 long years, in the month of July, by a Chinese leader. Check these mobile phones by Huawei that plug n point has. Why are we talking about Huawei here? It is a Chinese multinational company!

The relation between the two:

The renminbi, the currency of “The People Republic of China”, clearing center that is located in the UAE handled CNY44.57bn that is 6.5 billion dollars in transactions. According to the central bank of United Arab Emirates, what they told to the news on Tuesday, this transaction was held between the two from the months of January to November. Only after the working 17 months of the renminbi clearing center these transactions happened, this represents that the UAE and China are clearing things and working together. This is an achievement, stated the central bank of the UAE. Even though this is an achievement but for these countries located in such area, this is still not near as it should be.

 

International trade:

China and the United Arab Emirates, both the countries are the mainstream exporters and core international traders in the region. For the project China is developing, that is “silk road” or “belt and road” UAE will be playing an important part in that. This project will link the city of Beijing in China to the other international markets in Asia and Europe going over the land and sea. By this, the international trade between China and UAE will improve along with more exposure for all other countries.

Now this project could end up in a catastrophe. Because China is capable of manufacturing products and copies of it, and offer them at the much lower cost. So, the value of the goods that some countries are offering could fall down to the ground causing them damage.

Coming back to the renminbi center, this was launched in May 2017. The purpose of this center launch in the UAE was to strengthen and support the trade and financial ties between the UAE and China itself. It is operated by the Agriculture Bank of China aka ABC!

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Clearing transactions and Better relations:

This clearing center is capable of handling all parts of currency transactions that will be made between China and the UAE. This will be from the date of commitment is agreed between the two, to the date, it is settled. By doing so the cost of the transaction and the time it takes will be reduced.

After the central bank of the People’s Republic of China held a workshop with the People Bank of China and Agriculture Bank of China, the Deputy Governor of the UAE central bank, Sheikh Mohamed Ali Bin Zayed al-Falasi, spoke to the members and audiences. He stated that the UAE is pleased to avail this opportunity and continue its commitment and relations to develop the renminbi clearing schedules and arrangements. Further making our relations better and making trade and investment affairs good with China.

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