China is targeting small states like Mauritius, Iceland, and New Zealand to strike free trade agreement and other trade pacts rather than larger, more politically cumbersome regional deals with more powerful entities like the European Union, according to a new article by Lauren Johnston from the SOAS China Institute and Marc Lanteigne of the University of Norway.
The two scholars note that China always takes lessons from negotiating comprehensive trade deals with these small countries, which it can then apply to its negotiations with more powerful states. For example, the fact that Mauritius is home to a yuan clearing and settlement facility will provide insights as to how China can possibly integrate a future digital currency into its trade ties on the continent, said the two scholars.
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