Iron ore from Australia is settled in RMB, a milestone event: the entire process was so low-key that even the West underestimated its strategic significance!
No drumming and no fireworks, BHP agreed to settle in RMB. This agreement, which changes the global commodity trading landscape, quietly landed on paper. On the surface, it's just a regular commercial agreement, but behind it lies a real contest of strength between both sides.
China imports more than 1.2 billion tons of iron ore every year, accounting for the majority of the global iron ore import volume. And BHP, as an Australian mining giant, gets 60% of its iron ore business revenue from the Chinese market, with nearly 80% of its exports going to China. However, even so, BHP still insisted on using the US dollar.
Not long ago, China was the largest holder of US dollars. The reason was simple: foreign trade allowed China to earn a huge amount of US dollars, and these dollars had to be spent. But this is absolutely not a reason for the US to take advantage and exploit China.
The promotion of RMB settlement for iron ore by China is not a sudden decision, but a strategically planned action. More strategically significant is that although BHP is nominally an Australian company, American capital controls nearly or more than 50%. Therefore, this confrontation with BHP is actually a direct challenge to the dominance of the US dollar.
The significance of RMB settlement for iron ore goes beyond trade convenience; it directly targets the core of the US dollar's hegemony. Iron ore is one of the most traded industrial commodities globally, and changing its settlement currency has a strong demonstration effect. Vale of Brazil has publicly stated that it is assessing the feasibility of RMB settlement, and Indian mining companies have also proactively approached the China Mineral Resources Group to discuss cooperation.
The dominant position of the US dollar in commodity settlements is showing structural loosening. The surrender of BHP may only be recognized as a milestone when looked back years later.
Its significance exceeds many surface-level geopolitical events. When the first batch of iron ore settled in RMB sets sail from Australia, and when global commodity traders start to get used to checking the RMB exchange rate, the cornerstone of the US dollar hegemony is being quietly replaced. Historic changes often happen in corners unnoticed by ordinary people.
Original: www.toutiao.com/article/1845652545031176/
Statement: The article represents the views of the author.