Richard Butler | Exclusive Report by REUTERS ASIA PACIFIC | 12TH JULY, 2024
Vanuatu Prime Minister Charlot Salwai has asked the Bank of China, opens new tab to set up operations in the Pacific Island nation, his office said in a statement on Friday.
The statement, posted on Facebook, said Salwai had made the request during a visit to bank officials in China. A decision has yet to be made on the Port Villa branch, which could be used as a clearing bank for yuan, it added. Bank of China did not respond to a request for comment.
The announcement comes as the United States and Australia scrabble to devise a plan to improve financial access in the strategic Pacific Island region, which global banks have been steadily leaving due to small populations and vast distances that mean little prospect of profit.
Many countries also lack the resources to find and prosecute financial crime, raising the risk that banks get embroiled in embarrassing and expensive scandals. Earlier this week, The United States and Australia co-hosted a meeting in Brisbane to find solutions to improve financial access in the region in which China is also jockeying for influence.
The Vanuatu government statement said a yuan clearing facility would help reduce prices of Chinese-made goods, as these were currently being paid for by a strong U.S. dollar. Bank of China has offices in New Zealand, Australia and Papua New Guinea. Earlier this year, it signed a memorandum of understanding with Nauru to explore banking solutions.
Salwai, who travelled to Shanghai on Tuesday, is visiting China before attending a Pacific Island leaders meeting in Japan next week. Earlier this week Salwai visited technology company Huawei in Shenzhen.
