A billionaire businessman from Israel, Idan Ofer has inked a major deal with the Chinese shipbuilding firm Jiangnan Shipyard. The Eastern Pacific Shipping, a firm owned by Ofer. which is headquartered in Singapore made a landmark agreement with China’s Jiangnan Shipyard for six ultra-large ethane carriers. Eastern Pacific Shipping has ordered 150,000 cubic meter (CMB) ethane carriers from Jiangnan Shipyard and the deal is worth $8 billion. What makes the agreement historic is that BRICS member China will receive 56.7 billion in Chinese yuan (equivalent to $8 billion) and not the US dollar.
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Both parties agreed to settle trade worth $8 billion in the Chinese yuan and sideline the US dollar, reported TradeWinds. BRICS member China will give a boost to the Chinese yuan through the deal ending reliance on the US dollar. The reason why the shipbuilding company has opted to pay the Chinese yuan for six ultra-large ethane carriers remains unknown. However, the trade represents a win-win situation for both parties as the foreign exchange rates will be cut down.
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BRICS: The Chinese Yuan Looks to Overtake the US Dollar
BRICS country China is pushing the Chinese yuan as the first choice of payment to overseas companies seeking business. Industry giants in the Communist country are looking to sideline the US dollar and push the Chinese yuan for settlements. This is not the first time that China has taken on the US dollar. Zambia was made to pay the Chinese yuan worth $2 billion for an international copper trade with China in 2023. Read here to know full details about the copper trade deal between Zambia and China.
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If BRICS start pushing their local currencies for trade, the US dollar will be on the path of a decline. The American economy could be in jeopardy and lead to turmoil in the markets. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.