De dollarization in progress: China Thailand economic relations are getting rid of the impact of the fluctuation of the US dollar

【 China and Thailand agree to replace US dollars with local currencies in mutual settlement 。 On Tuesday, the central banks of the two countries signed a memorandum of understanding on a cooperation framework aimed at promoting bilateral local currency transactions. On May 21, the President of the People's Bank of China, Pan Gongsheng, met with the Governor of the Bank of Thailand (the Bank of Thailand), Thabo Sutivanarubu. After the meeting, the two sides signed the Memorandum of Understanding between the People's Bank of China and the Bank of Thailand on Promoting the Cooperation Framework for Bilateral Local Currency Transactions. 】

China has become the second largest source country of foreigners in Thailand after Malaysia, and plans to increase this level to 1 million people every year. The removal of restrictions during the epidemic has also removed obstacles to the trade of vegetables and fruits between the two countries, including the supply barrier of durian to China. In addition, Thailand plans to become one of the ASEAN automobile manufacturing centers with the support of China, and rely on China's financing and technical assistance to modernize its railway transportation.

All this has prompted both sides to actively seek new, convenient and reliable bilateral payment and settlement methods, one of which is to get rid of the impact of the fluctuation of the US dollar. Wang Qin, a professor of the Nanyang Research Institute of Xiamen University, pointed out in an interview with the Russian Satellite News Agency that bilateral cooperation in local currency transactions is conducive to reducing the uncertainty caused by the instability of the US dollar exchange rate.

Professor Wang Qin said: "At present, China Thailand relations maintain healthy and stable development, and the scale of bilateral trade continues to expand. This time, the two sides further promote the use of local currency settlement in trade, which should be said to be very beneficial to the economic and trade exchanges between the two countries. We can see that other Southeast Asian countries, such as Malaysia, are also accelerating the pace of local currency settlement and actively expanding the use of ringgit in trade. In fact, there is exchange rate risk in the settlement of transactions in US dollars. In particular, the US dollar exchange rate is now relatively volatile, such as the exchange rate of Thai baht against the US dollar and RMB against the US dollar. If the trade between the two countries is still settled in US dollars, there will be a certain exchange rate risk. Settlement in local currency can reduce the uncertainty caused by the fluctuation of US dollar exchange rate. In addition, the wider use of local currency transactions is also conducive to better promoting the prosperity and stability of trade within the RCEP region. "

Nikita Maslenikov, an expert of the Political Technology Center, pointed out in an interview with the Russian Satellite News Agency that, Giving up the US dollar in mutual settlement is becoming a stable trend in the ASEAN region ， The decision made by China and Thailand is very timely, which can spread currency risk by switching to local currency.

Nikita Maslenikov, an expert, said: "The transition to local currency transactions has strengthened China's high-level plan to strengthen the role of the RMB as an international payment means. At present, the RMB only accounts for more than 4% of the payments and transactions through the SWIFT system, which is the fourth largest settlement after the US dollar, the euro and the pound. This position is quite convincing, and Thailand believes in the authority of the RMB. Critics of RMB trading believe that China is suspected of tying other countries with itself through monetary channels. China is fully aware of the political background of this statement and has taken correct and prudent action. For Thailand, there is no such danger. The Thai baht is becoming one of the attractive currencies in the region, and China naturally considered taking advantage of this reality. "

One of the main topics of the last ASEAN Summit and the meeting of ASEAN leaders and dialogue partners held in Jakarta last October was to achieve "de dollarization" by increasing local currency payments. For example, after these meetings, Malaysian Prime Minister Anwar Ibrahim disclosed that he had discussed with China and ASEAN countries on how to use their own currencies in trade. He said that this proposal has received a positive response from the Chinese side. In addition to China, the Malaysian Prime Minister also negotiated with Indonesia and Thailand to reach a similar solution.

Today, China and ASEAN are each other's largest trading partners. The bilateral trade volume has grown year after year and is expected to reach a new high of nearly 500 billion US dollars this year. Refusal of US dollar payment will bring impetus and stability to trade development. A more proactive shift to domestic currency payments can enhance China and ASEAN's ability to reduce the negative impact of external factors on the overall development of bilateral relations. At the same time, the willingness of ASEAN countries to expand the circulation range of RMB has undoubtedly strengthened people's confidence in RMB as one of the major currencies for international payments.