Chinese Renminbi in the Caribbean: Opportunities for Trade, Aid and Investment
Picture: Chinese Renminbi in the Caribbean - Opportunities for Trade, Aid and Investment
Summary

 

This research paper analyses the potential benefits and risks of the use of the Chinese Renminbi (RMB) in the Caribbean Development Bank's (CDB) Borrowing Member Countries (BMCs). To this end, the paper will draw on insights from existing examples of the use of RMB in commercial trade between the People's Republic of China and Suriname, a BMC that leads the Caribbean in RMB use. It will analyse which potentialities could arise in the use of RMB such as, increased trade and foreign direct investment (FDI), as well as currency and liquidity risks that would require mitigating actions. The paper also addresses the issue of the financial intermediation of aid, trade and investment funds vis-avis the provision of alternative financial networks in the form of Chinese corresponding banking relations and clearing houses. We analyse how these developments have presented opportunities to increase BMC access to global financial services.

 

Table of contents

This research paper aims at analysing the potential benefits and risks of the use of the Chinese Renminbi (RMB) in the Caribbean Development Bank’s (CDB) Borrowing Member Countries (BMCs). To this end, the paper will draw on insights from existing examples of the use of RMB in commercial trade between the People’s Republic of China and Suriname, a BMC that leads the Caribbean in RMB use. It will analyse which potentialities could arise in the use of RMB such as, increased trade and foreign direct investment (FDI), as well as currency and liquidity risks that would require mitigating actions. The paper also addresses the issue of the financial intermediation of aid, trade and investment funds vis-avis the provision of alternative financial networks in the form of Chinese corresponding banking relations and clearing houses. We analyse how these developments have presented opportunities to increase BMC access to global financial services. RMB’s inclusion in the International Monetary Fund

Download PDF