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Professor States Saudi Arabia’s Inclusion in BRICS Would Boost Adoption of Chinese Yuan for Trade
Professor Ashok Swain from Uppsala University’s Department of Peace and Conflict Research states that Saudi Arabia’s entry into the BRICS economic bloc “would expedite the bilateral trade being conducted with the yuan as the currency of exchange.”
How Saudi Arabia Joining BRICS Could Enhance the Use of Chinese Yuan
Ashok Swain, a professor specializing in peace and conflict research at Uppsala University in Sweden, informed Al-Monitor last week that Saudi Arabia’s accession to the BRICS economic bloc would promote the utilization of the Chinese yuan as a trading currency. Professor Swain leads Uppsala University’s Department of Peace and Conflict Research and holds the UNESCO chair on International Water Cooperation.
In his remarks regarding Saudi Arabia’s membership in the Shanghai Cooperation Organization (SCO) and BRICS, which includes Brazil, Russia, India, China, and South Africa, he stated:
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There is no doubt that Saudi Arabia becoming a member of the China-led SCO and BRICS would expedite the bilateral trade being conducted with the yuan as the currency of exchange.
In March, Saudi Arabia became a dialogue partner of the SCO. The Shanghai Cooperation Organization was founded in 2001 as a political, economic, and defense alliance; it is recognized as the largest regional organization globally. Although Saudi Arabia is not yet a member of the BRICS group, the nation has shown interest in joining. Last month, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman Al Saud discussed possible collaboration between Saudi Arabia and BRICS.
Additionally, Saudi Arabia is actively engaging with Beijing to price some of its oil exports to China in yuan, according to reports. While discussions regarding yuan-denominated oil contracts have been ongoing intermittently for six years between the two countries, they have gained momentum this year. The Uppsala professor emphasized that trading oil in yuan would represent a “significant advancement” for China and “a notable challenge to the dollar’s position.”
An increasing number of nations are moving away from utilizing U.S. dollars for trade settlements. China’s yuan has recently surpassed the USD as the most traded currency in Russia and has become the predominant currency for cross-border payments in China.
The BRICS group is also in the process of developing a new currency aimed at diminishing its member countries’ dependence on the U.S. dollar. A former White House economist suggests that a BRICS currency will undermine the U.S. dollar’s supremacy. Another economist has predicted that the yuan and euro will challenge the U.S. dollar’s dominance, leading to a tripolar reserve currency landscape involving the three currencies.
