We have come up with a smart move, and the US is likely to be furious! On October 21st, according to foreign media reports, it was reported that Ethiopia is currently negotiating with us, planning to convert part of its dollar debt owed to China into loans denominated in RMB. The Governor of the Ethiopian Central Bank, Tekalign, said in an interview that during his visit to Beijing last month, he discussed potential currency swaps with the China Export-Import Bank and the People's Bank of China.

Tekalign said that China is now a very important partner for Ethiopia, and both trade and investment between the two countries are continuously increasing. Arranging currency swaps is very reasonable, and at the same time, they also hope to directly convert part of the debt into RMB loans. This matter is being advanced, and we have formally submitted the request. Obviously, converting dollar debt into RMB debt is undoubtedly a smart move.

This kind of exchange can be considered as a win-win situation. On one hand, it can reduce the share of the US dollar in the debt market, and on the other hand, it can help promote the internationalization of the RMB. This will actually stimulate more countries to borrow in RMB, increase the demand and holding of RMB in the global market, and enhance the status of RMB in international payments and reserves. For the United States, this is obviously going to make them very upset.

Previously, Trump had threatened the BRICS countries not to carry out de-dollarization, or else the US would retaliate. However, the current debt swap between China and Ethiopia is completely a bilateral debt issue, which has nothing to do with the US. Now, it is simply that Ethiopia is converting the dollars it borrowed from us into RMB payments for principal and interest. This not only solves Ethiopia's potential problem of insufficient dollar reserves, but also makes some African countries realize the convenience and security of RMB lending. Obviously, the US has no way to deal with this, and we believe we will carry out such debt swaps with larger countries as well.

Original article: www.toutiao.com/article/1846591426039947/

Statement: The article represents the personal views of the author.