‘If we could use RMB and Taka in bilateral trade, it will reduce transaction cost and mitigate exchange risk’ - Chinese Ambassador Li

[MH.Yang]

At present, 28 countries have accepted CNY settlement, including Russia, Turkey, Vietnam, Nigeria, Algeria and other countries.

In addition, 56 countries have signed currency swap agreements with China, including Britain, Japan, South Korea, Brazil, Switzerland and other countries.

China only hopes to sign a currency swap settlement agreement with Bangladesh. China has long signed similar agreements with many countries.

Why are you so afraid of American retaliation?

 

[bluesky]

Why are you so afraid of American retaliation?

BD exports $10 billion worth of goods every year. So, BD should not fall into the Chinese wormhole. We will get sanctioned.

 

[MH.Yang]

BD exports $10 billion worth of goods every year. So, BD should not fall into the Chinese wormhole. We will get sanctioned.

Neither America's allies (Britain, Japan, South Korea, Turkey) nor America's enemies (Russia, Iran) have been sanctioned for such agreements.

Why do you think Bangladesh will be treated specially?

 

[bluesky]

Neither America's allies (Britain, Japan, South Korea, Turkey) nor America's enemies (Russia, Iran) have been sanctioned for such agreements.

Why do you think Bangladesh will be treated specially?

No, you are wrong about Japan. Japan has never agreed to trade goods with RMB. It maybe the same with other countries that you mentioned.

However, Japan has only a currency swap agreement with China on a limited s scale. Here, the Chinese Ambassador is talking about trading with the use of RMB.

It will be a death wish for BD. This will not be seen kindly by America. It did not see kindly with Libya and Saddam’s Iraq. They were destroyed.

 

[MH.Yang]

With regard to Saddam, the USA in the 1990s and 2000s was not friendly to any country, and the USA would of course attack the supporters of the euro. At that time, China did not want to internationalize CNY.

However, the USA in the 2020s has no strength to treat other countries unfriendly, and it is impossible for them to copy the means of dealing with Iraq and Afghanistan.

As for Gaddafi and Libya, it is not that the United States is not friendly to Gaddafi, but that all P5 countries are not friendly to Gaddafi.

Indeed, China and Japan have only signed currency swap agreements. Exchange 200 billion CNY (30 billion US dollars) each year. The annual trade volume between China and Japan is about 300 billion US dollars, which means that 10% of the trade can be directly settled in the currencies of the two countries. China and Bangladesh can also sign similar treaties, which is a strong support for maintaining the stability of Bangladesh's currency.

 

[emotionless_teenage]

Iraq's Saddam was ousted and hanged for trying to switch from Dollar to Euro and Pound.

Libya's Gaddafi was ousted and killed for similar reasons.

BD should avoid talking about the dangerous Chinese propositions to switch a part of a BD-China trade from dollars to Chinese RMB. BD exports $10 billion worth of goods to the USA.

The proposition is too dangerous for BD.

What the ambassador is proposing is currency swap, not blanket switch from dollar to Yuan or Euro or Dinar or whatever.

For example, both central banks agree that a currency swap of 3 billion dollar worth of RMB and Taka at set price so any payment, usually between SMEs, could be done using either Taka or RMB until said 3 billion dollar worth of transaction is reached

The deal could be done as one off or renewed annually.

 

[mb444]

Neither America's allies (Britain, Japan, South Korea, Turkey) nor America's enemies (Russia, Iran) have been sanctioned for such agreements.

Why do you think Bangladesh will be treated specially?

People here do not fully understand what is being proposed.

I suppose BD has always been risk averse by default.

However this does not represent any kind of risk whatsoever.