Thread by @IGWTreport

The birth of the petroyuan.

A thread:

At #IGWT we have been writing about de-dollarization for a number of years. This topic is often misunderstood and is a theme playing out over decades, not years.
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We regard Chinese President Xi Jinping's visit to Saudi Arabia for the China-Gulf Cooperation Council (GCC) Summit a pivotal moment in this storyline.
What is the GCC, what are they planning and why is it important?
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The GCC member countries are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). Together, the GCC countries deliver more than 25% of the world's total crude oil exports, with Saudi Arabia alone accounting for 16.5% of worldwide crude exports in 2001
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China overtook the EU as the region's largest trading partner in 2020, and in 2021 bilateral trade between China and the GCC totalled $233b.

President Xi's keynote speech at the summit earlier in December is of particular interest. Let's take a look at what he said:
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"Friendly exchange between China and GCC countries goes back nearly two millennia in history. Throughout those years, the two peoples interacted with each other continuously along the ancient Silk Road inspired by the "Eastern wisdom" of peace, harmony and truth."
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"China and GCC countries have all along supported each other's sovereignty and independence, respected each other's development paths, upheld equality between countries regardless of their size, and stood firm in defending multilateralism."
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"Standing at a historical crossroads, we should carry forward the tradition of China-GCC friendship, and take the establishment of the China-GCC strategic partnership as an opportunity to enrich the strategic substance of this relationship."
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"We need to jointly uphold the principle of non-interference in internal affairs, practice true multilateralism, and defend the common interests of all developing countries."
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"We should be partners for common security. China will continue to firmly support GCC countries in safeguarding their security, support the efforts by regional countries to resolve differences through dialogue and consultation and build a Gulf collective security architecture"
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He then listed priority areas for China to work on with GCC countries in the "next three to five years":

"Setting up a new paradigm of all-dimensional energy cooperation. China will continue to import large quantities of oil and increase purchases of LNG from GCC countries
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and strengthen our cooperation in the upstream sector, engineering services, as well as storage, transportation and refinery of oil and gas.
The Shanghai Petroleum and Natural Gas Exchange platform will be fully utilized for RMB settlement in oil and gas trade.
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The two sides could start currency swap cooperation, deepen digital currency cooperation and advance the m-CBDC Bridge project."

Not only will they pay for fossil fuels in RMB, but China will invest in the GCC's upstream oil and refinary infrastructure.
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Furthermore, they plan on using their own platform for exchange and their own new CBDC payment processing system.

This is not just paying for fossil fuels in a currency other than USD, this is an entire parallel economic system.
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Taking this into consideration as part of the bigger picture, along with happenings regarding BRICS+, OPEC+ and China's Belt and Road Initiative, we can see the de-dollarization theme greatly accelerating over the next 3-5years.
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For more on de-dollarization, check out our chapter on this topic in this year's #IGWT report on page 145.

Available for free download here:
ingoldwetrust.report/?lang=en
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