The Financial Silk Road

China’s alternative to the SWIFT payment messaging system, the Cross-Border Interbank Payment System (CIPS), is now available in Africa. Standard Bank, Africa’s largest bank by assets, is the first institution on the continent to offer CIPS. This move supports China’s goal to build an international financial system outside US and European control and to reduce reliance on the US dollar by facilitating renminbi-based cross-border payments.

A blockchain-based platform for trading African local currencies has been launched by the Pan-African Payment and Settlement System (PAPSS), backed by African political leaders and African Export Import bank. The platform aims to simplify profit repatriation for companies and reduce Africa’s reliance on the U.S. dollar in regional trade. Developed in partnership with Cameroon-based blockchain firm Interstellar, the exchange has been tested by about 80 multinational companies, including insurers, facing challenges accessing foreign exchange. In the future, the platform could include trading regulated African currency stablecoins like Nigeria’s cNGN.

Pakistan has secured a $1.8 billion loan rescheduling agreement from China, offering partial relief as the country strives to meet foreign exchange reserve targets under its IMF program. The restructured loans, which include concessional and preferential credit from China’s EXIM Bank, are tied to infrastructure projects and will be finalized next month. Although less than the $3.4 billion Pakistan initially sought, officials consider the deal vital for economic stability. Commercial loans and some credit facilities were excluded from the agreement. [Daily Ausaf].

Ghana’s parliament has approved a $2.8 billion debt restructuring agreement with 25 creditor nations, including China and France. The deal supports disbursements under Ghana’s IMF bailout program, aimed at addressing its severe economic crisis. The agreement follows a memorandum of understanding signed in January, after the country defaulted on most of its external debt in December 2022.

China has raised the foreign-exchange quota for qualified domestic institutional investors (QDII) to $170.9 billion, ending a 13-month freeze. This increase allows approved investors to put more money into overseas assets, reflecting eased depreciation pressure on the yuan and cooling demand for foreign stocks like those in the US. The quota hike includes an additional $2.1 billion for securities firms, $660 million for banks, and $300 million for insurance companies. Chinese investors’ interest in US stocks has declined recently, shifting focus to opportunities closer to home, such as Hong Kong equities.

The Shanghai Gold Exchange (SGE) has opened an international gold vault in Hong Kong, launching gold trading contracts for delivery in the city. This move is part of the Hong Kong-Shanghai Action Plan aimed at boosting collaboration between the two financial centres. Hong Kong’s Financial Secretary Christopher Hui said the new vault will expand renminbi-denominated gold trading, attract international investors, increase gold storage, and support the city’s growth as a global gold trading hub.

China’s DJI, the world’s largest drone maker, appears to have quietly withdrawn from the U.S. market, with its website showing no stock and most retailers sold out. While DJI denies exiting and blames customs issues, the move comes amid increased U.S. scrutiny, looming bans, tariffs, and Chinese export controls. U.S. emergency services, which rely heavily on DJI drones, have warned that a ban could jeopardize operations due to inferior domestic alternatives.

Following negotiations in Geneva, the US and China have signed a trade agreement aimed at ending their ongoing trade war, according to US President Trump. The deal includes mutual steps: the US will ease part of its tech restrictions, while China will release rare earth and other exports under a new London trade framework.