BRICS Shifts $2 Billion Copper Trade from US Dollar to Chinese Yuan

• China Influences African Nations to Use Chinese Yuan for Cross-Border Trade
• Zambia's Copper Trade with China
• Zambia's Annual Copper Trade Worth
• China's Push for De-Dollarization
• Chinese Yuan Threatens the US Dollar In The International Markets
• Impact on the US Dollar

China Influences African Nations to Use Chinese Yuan for Cross-Border Trade

As a BRICS member, China is encouraging African countries to abandon the US dollar in favor of the Chinese Yuan for cross-border transactions. In particular, the Bank of China's Zambian branch is actively promoting the use of the Chinese Yuan in Southern Africa.

Zambia's Copper Trade with China

Zambia, the second-largest copper producer in Africa, plays a significant role in the world's copper market since China, the world's largest copper consumer, is a significant trade partner. Thus, China is keen on maximizing the potential of the international copper trade by persuading Zambia to adopt the Chinese Yuan, thereby leaving the US dollar behind.

Zambia's Annual Copper Trade Worth

Zambia's copper trade with China is worth $2 billion annually. Broken down, Zambia exports $1.64 billion worth of raw copper and refined copper valued at $340 million to China. In Zambia's foreign export earnings, copper represents a whopping 70% and significantly contributes to its GDP growth.

China's Push for De-Dollarization

China is promoting a de-dollarization narrative, appealing to Zambia to use the Chinese Yuan rather than the US dollar for copper payment. The BRICS nation holds a significant advantage in persuading Zambia, as it controls the supply-chain interests in Africa. If Zambia agrees to China's proposal, the $2 billion copper trade will, for the first time, be settled in the Chinese Yuan, not the US dollar.

Chinese Yuan Threatens the US Dollar In The International Markets

China is at the forefront of the BRICS alliance's aggressive push for de-dollarization. The BRICS strategy is to replace the US dollar, the current global reserve currency, with local currencies. This move would bolster their domestic economies and enhance the prospects of local currencies.

Impact on the US Dollar

The US dollar will be the most affected if such a change occurs in the near future. If BRICS countries stop using the dollar for trade, numerous sectors in the US could face severe consequences.

Edited by Jonathan Stoker