China wants to buy oil and gas from Persian Gulf countries in yuan, Xi Jinping said at a summit of Arab countries in Saudi Arabia.
It remains unclear when this move will come into force and whether Gulf countries will agree with it or not.
However, Saudi Arabia, the world’s largest crude oil exporter, is already in talks with China to establish oil trade in yuan.
If the oil-for-yuan plan goes through, it will erode the US dollar’s status as the world’s reserve currency. This is one of the goals of China, which is trying to replace it with the Chinese yuan. However, the yuan is not a freely convertible currency, as Beijing maintains foreign exchange controls over its national currency.
