RMB nurtures Chinese ties

RMB Namibia on Wednesday announced a new initiative that will see the investment bank become the first local commercial lender to deal in cash notes of the Chinese currency renminbi, otherwise known by its basic unit, the yuan. At a gala dinner launch in Windhoek, Chinese Ambassador to Namibia Xin Shunkang said the RMB solution would prove valuable to Chinese businesses in Namibia as a comprehensive payment solution. “They will benefit from easy exchange of Namibia dollar to Chinese yuan, easy transfer of Namibia dollar back to China, without exchanging Namibia dollar to US dollar,” Shunkang said. He said that would mitigate exchange rate difference loss, thus encouraging more Chinese companies to operate in Namibia. The Chinese yuan, he added, was “going international”, challenging Namibia’s trade and economic sectors to expand their involvement with Chinese enterprises. “I also hope RMB can enlarge and deepen cooperation with Chinese banks and financial institutions. We can contribute to the liberalisation of the Chinese economy and benefit the overseas investment of Chinese companies by joint effort.” FNB Namibia’s Senior Research and Development Manager Namene Kalili described the development as a means to speed up a current slow recovery of exports to China. Trading for good “Trade with China has exploded from a mere N$388 million to N$5.6 billion last year, making China one of our largest trade partners for 2015,” Kalili said. Detailing the history of trade between the two countries, the economist said exports to the Asian giant enjoyed robust growth between 2006 and 2009, suffering a sharp setback between 2010 and 2011. “Metal ore exports to China suffered a serious setback after the commodities super-cycle came to an abrupt end and local production, and hence exports contracted significantly after which the trade balance with China fell into deficit,” Kalili said. From an importer’s perspective, he said imports from China to Namibia mostly consist of transition goods, used in industrial production. “Chemicals for processing ores, machinery, iron and steel are all inputs required to produce goods and services, for exporting these goods and services and for earning foreign revenue needed to develop our Namibian economy into a knowledge-based economy as articulated in Vision 2030,” Kalili said. “China is likely to outsource labour-intensive and low-value added products offshore, whilst unlocking considerable value in Africa’s fledging manufacturing industries through the provision of capital and expertise, and established producers of intermediate goods.” DENVER ISAACS