- China is aggressively promoting the Chinese yuan for trade with Africa to counter the continent’s costly dependence on the US dollar.
- Africa was China’s fastest-growing export market in 2024, with a 27% increase in Chinese goods imports.
- While the wider BRICS alliance has slowed its de-dollarization push, China remains its sole member actively advancing its currency through measures like zero-tariff policies and currency swaps.
China is intensifying its campaign to establish the Chinese yuan as a primary currency for international trade across Africa, directly challenging the long-standing dominance of the US dollar. This strategic move comes as the broader BRICS alliance has moderated its efforts to promote local currencies for global settlements. However, transacting in US dollars has become a significant financial burden for African nations, costing the continent an estimated $5 billion annually in transaction fees alone. Consequently, nations are seeking more affordable alternatives to settle imports, with China offering currency swaps in yuan to ease these financial pressures.
Beyond high transaction costs, reliance on the dollar also exposes African economies to risks like inflation and mounting debt. Consequently, Africa’s drive for currency diversification aligns perfectly with China’s geopolitical and economic ambitions. Meanwhile, trade between the two regions is accelerating, as Africa became China’s fastest-growing export market in 2024, with Chinese goods rising by over 27%. To capitalize on this momentum, China has implemented a zero-tariff policy specifically for African trade conducted in yuan.
This incentive is a key part of China’s strategy to leverage global trade tensions for the yuan’s benefit. “Among the 11-member BRICS alliance, China is now the only country to push the Chinese yuan for trade”, while other members have scaled back their efforts. This singular focus positions the yuan as the bloc’s primary challenger to dollar hegemony, with Africa serving as its critical testing ground.
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