Shan State China-Myanmar border Reuters quoted a government statement issued by Myanmar’s Ministry of Information and Investment as saying that the Myanmar military government will begin to accept the Chinese currency, the renminbi, as the official settlement currency for trade and investment with its northern neighbors. This move is mainly to restart idle joint projects and establish closer economic ties with Beijing, which has provided financial support and Covid-19 vaccine to Myanmar during the pandemic. The statement also identified infrastructure projects with China, saying that these projects are the “top priority” of Myanmar’s economic recovery, including railway and port plans…
The Burmese military government will begin to accept the Chinese currency renminbi as the official settlement currency for trade and investment with its northern neighbors. Reuters Quoted from a government statement issued by the Ministry of Information and Investment of Myanmar.
This move is mainly to restart idle joint projects and establish closer economic ties with Beijing, which has provided financial support and Covid-19 vaccine to Myanmar during the pandemic.
The statement also identified infrastructure projects with China, saying that these projects are “main priorities” for Myanmar’s economic recovery, including railway and port plans.
Chinese official media Global Times Previously reported on Myanmar’s RMB plan, saying that the move was aimed at solving the country’s economic turmoil and shortage of foreign currencies.
The severe economic crisis after the military coup
The military coup plunged Myanmar into a severe economic crisis and triggered US sanctions. In addition to the departure of many foreign investors from the country, it also brought it closer to China as a trading and investment partner.
Myanmar officials said in a statement that the pilot currency project will “further improve bilateral cooperation with Beijing” and “significantly improve border trade”, especially agricultural products.
The government expects moderate economic growth
They further pointed out that Myanmar’s economic downturn this year is “far less severe than that predicted by some international economists.” As the economy gradually recovers, the country is expected to record moderate growth in the shortened fiscal year of 2021/22.
Contrary to the optimistic outlook of the military government, the United Nations estimates that Myanmar was once one of the fastest growing economies in Asia in the short term. However, due to the dual economic impact, nearly half of the population will be pushed below the poverty line next year. The coup and the Covid-19 pandemic, and the World Bank and the International Monetary Fund predict that in the 2020/21 fiscal year ending September 31, Myanmar’s GDP will shrink by 18% and may shrink further.
