China has the highest economic growth rate and expansion around the world, Egyptian economist Ahmed Khattab, said, with many nations turning to it for economic aid.
Khattab told RT exclusively that Chinese Panda bonds may indeed be a solution to reduce pressure on US dollar demand in Egypt.
The Chinese yuan has a great economic position globally, he explained and has been expanding around the world, especially since the Russian-Ukrainian conflict.
He predicts that the war will reshape the global economy and there will be no unipolar world.
The crumbling reign of the US dollar
Khattab also expected that the US will not be the only power controlling the world but there will be others such as the BRICS group (Brazil, Russia, India, China, and South Africa).
The Gulf Cooperation Council may have a unified currency following a global trend to dispense with the dollar, he added, but the matter requires around five to ten years to occur.
Many factors confirm that the global peg to the dollar will gradually decrease such as Russia launching its own SWIFT system, which China also deals with, and the BRICS group’s tendency to have a unified currency, said Khattab.
Khattab stressed that the Chinese Panda bonds will indeed help Egypt reduce the demand for the dollar, will increase cooperation with China, and will be an opportunity to integrate with China economically.
China’s flexibility would open the door to an increase in demand for Panda bonds, he added, contrary to the many conditions imposed by the US authorities.
Panda bonds are bonds denominated in Chinese yuan, and are issued by foreign borrowers outside China, provided that it is offered in the domestic market of China.
Through its proceeds major economic projects are financed.
The trading period of these bonds ranges from one year to ten years, and the size of the issues ranges between one and ten years. While the volume of issuances ranges between one and four billion yuan.
Last year, the value of the Panda market was nearly US$21 trillion, amid expectations of further demand for it.
