DUBAI, April 26 (Reuters) - Industrial and Commercial Bank
of China has cleared more than 590 billion yuan ($86
billion) in transactions in Qatar in the nearly two years since
it opened its clearing centre in the Gulf state, an executive
The move reflects a surge in trade and investment between
China and Gulf Arab states in recent years, though most business
between the two sides is still conducted in U.S. dollars.
The clearing centre was launched in June 2015 as the Middle
East's first location for clearing transactions in the yuan to
promote business ties. A clearing centre can handle all parts of
a currency transaction from when a commitment is made until it
is settled, reducing costs and time taken for trading.
"ICBC Doha opens the door to China's onshore RMB (yuan) and
foreign exchange markets to local financial institutions,
corporates and investors," Zheng Chunyi, General Manager of ICBC
Doha, said in an interview. "Our data shows that Qatar, the
United Arab Emirates and Kuwait are the most active Middle East
countries using the RMB clearing centre for direct payments with
Chinese mainland and Hong Kong."
Chunyi said trade between Gulf Cooperation Council countries
and China had surged more than 600 percent in the past decade,
with Chinese investment in the Middle East reaching more than
$160 billion between 2005 and 2016.
The yuan has established itself as the most active currency
used by the UAE and Qatar for direct payments with the Chinese
mainland and Hong Kong, according to SWIFT data.
But most trade between the region and China is still
denominated in dollars and China's payments for its oil imports
from the region are believed to be denominated in dollars, the
main currency used in global oil trade.
"As the trade volume between China and the region continues
to grow in a rapid pace, we are looking forward to seeing more
and more usage of RMB in the region," said Chunyi.
In a further move to boost commerce between the two sides,
Agricultural Bank of China (AgBank) was last year given
permission by China's central bank to clear yuan transactions in
($1 = 6.8911 Chinese yuan renminbi)
(Writing by Tom Arnold; Editing by Mark Potter)