China is going beyond BRICS as Chinese mining firms operating in Zambia are paying taxes in the African country in the yuan and not the US dollar. The Zambian government confirmed that Chinese mines have started paying royalties and taxes in the yuan. This is the first in Africa where the yuan is used to pay taxes to the government. The development highlights the strength of the Xi Jinping administration’s ability to make its local currency a part of all transactions.
The Bank of Zambia confirmed that payments in the Chinese yuan began in October. Africa is emerging as a key player in advancing the usage of the yuan with various methods. Apart from BRICS, the highest usage of the Chinese yuan is in Africa and is powering the currency abroad. China has a stronghold in Africa through the Belt and Road Initiative (BRI) as it finances several developmental projects. They include building seaports, airports, railroads, mining, and other infrastructural projects.
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Beyond BRICS, China Makes Zambia’s Mining Firms Pay Taxes in the Chinese Yuan
Zambia now holds a portion of its reserves in foreign currencies, and the Chinese yuan is gaining a major share. This adds pressure on the US dollar as it now has to compete with other local currencies. China is moving beyond the BRICS alliance and positioning the Chinese yuan as a global player. “The Bank of Zambia has the diversification and building-up of its reserves as a key objective, and purchasing renminbi enables the bank to actualize this objective,” read a report from the central bank.
The mechanism and groundwork to make the Chinese yuan spread in Africa are gaining presence. The Xi Jinping administration is internationalizing the currency even under the provocative nose of US President Donald Trump. While the BRICS alliance is slowly moving away from the US dollar, Africa is slowly beginning to accept the currency.