Written by: Wang Yang, Wen Yizhou
Recently, Huawei has made headlines for its large-scale imports of Argentine beef and red wine. Many people are curious: Is Huawei going to enter the food industry? Or is it expanding new businesses?
In fact, the significance of this matter far exceeds the imagination of most of us.
Huawei has signed a huge base station construction contract with Argentina. However, with the sharp increase in interest rates in the United States, Argentina's foreign exchange reserves are almost exhausted. After Milley took office as president, the Argentine peso continued to depreciate and even faced the threat of cancellation. Faced with this situation, Huawei faced a thorny problem: they could not receive hard currency, nor were they willing to accept the nearly collapsed Argentine peso. Therefore, Huawei innovatively adopted the method of "beef and wine debt repayment", which not only cleverly resolved Argentina's payment difficulties, but also successfully introduced high-quality South American beef and red wine to the Chinese market. This initiative not only opened up a new situation for Huawei, but also pointed out the direction for the new order of China's international trade.
Since 2009, China and Argentina have signed a currency swap agreement. So far, my country's central bank has signed bilateral local currency swap agreements with central banks and monetary authorities in 29 countries and regions, aiming to simplify the settlement process of international trade and investment. However, after Mille came to power, the collapse of the Argentine peso exposed a deep-seated problem: Although the bilateral local currency swap agreement has reduced the dependence on hard currency on the surface, it has failed to completely solve the fundamental problem of the extreme instability of currencies in many developing countries. It is based on this reality that China maintained a cautious attitude towards the renewal of the China-Argentina bilateral local currency swap agreement in the early days of Mille's tenure.
Against this background, Huawei's "beef and red wine debt repayment" plan just broke through this limitation. In the case of a shortage of local currency in developing countries, it cleverly used materials as a means of trade settlement, breaking the previous dependence on currency. It is precisely because of Huawei's breakthrough that China and Argentina renewed the bilateral currency swap agreement in 2023. In fact, this innovation is not an isolated case. Similar models have long been verified in China-Africa economic and trade, such as "Transsion mobile phones for African coffee beans", which also shows the huge potential of barter in the new trade environment.
However, not all companies can find suitable channels for material exchange like Huawei and Transsion. As the author Wang Yang once collected feedback from Yiwu merchants, in their transactions with some third world countries, they could only recover half of the payment due to the lack of hard currency on the other side during settlement. Although these trading countries or regions have a lot of resources needed by China, these resources are not what Yiwu merchants need. In this situation, it is not only necessary but even urgent to establish a global "barter" trade system.
Therefore, in the face of the real difficulties of developing countries, the traditional currency settlement model should be replaced by a more flexible "barter" model. Innovative models such as exchanging "beef and red wine" for "Huawei base stations" and "African coffee beans" for "Transsion phones" should be standardized and widely promoted to fully meet more trade needs. This is exactly the goal of the RWA (real asset) tokenization we advocated earlier.
We went to the UNESCO headquarters this month to participate in the Digital Learning Week and introduced the potential of RWA tokenization to representatives from many countries. The great interest shown by senior African leaders is a recognition of the potential of this concept. This technology can undoubtedly help Africa solve its practical difficulties in international trade. Africa has rich resources including oil, minerals and energy, but its long colonial history has led to the liquidity and pricing power of its resources being completely in the hands of Western consortiums. The RWA tokenization solution uses stablecoins to price materials. African materials will get rid of their dependence on hard currency and local currency, directly participate in international trade, and obtain the pricing power and liquidity they deserve.
It is no exaggeration to say that building a global RWA tokenization system will be a revolutionary change for the development of my country's "Belt and Road" initiative and trade cooperation with developing countries. This is not only a new model for the future development of global trade, but may even be the only solution to ensure the sustainable development of trade between China and developing countries. The advantages of RWA tokenization can be roughly summarized as follows:
1. Breakthrough liquidity: Converting illiquid physical assets into tradable digital tokens, making it easier to participate in global trade and promote the effective allocation and utilization of resources.
2. Solving the payment problem in developing countries: Through the innovative model of "barter", it effectively solves the problem of difficulty in payment in developing countries such as Argentina due to insufficient foreign exchange reserves, and promotes the smooth progress of international trade.
3. Improve trade efficiency: simplify the transaction process, greatly reduce the intermediate links, significantly reduce transaction costs, and accelerate trade turnover
4. Enhance transaction transparency: use blockchain technology to ensure that every transaction is traceable and verifiable, and improve the trust and security of international trade.
5. Promote the development of the "Belt and Road": provide new solutions for trade between China and developing countries, and strongly support the implementation and deepening of the "Belt and Road" initiative.
Interestingly, the main force driving the tokenization of RWA still comes from the United States and the West, mostly focusing on financial products. But we also see that Hong Kong has recently started a sandbox for the issuance of stablecoins. Asset-backed stablecoins are the core of the future development of RWA tokenization. On the contrary, without a prosperous and growing RWA ecosystem, the stablecoins issued by Hong Kong cannot have any application scenarios and will eventually be a forgotten product.
Therefore, we once again call for: Hong Kong must aspire to become a pioneer in the physical RWA tokenization system and do its utmost to help our country's future development. With the advantages of "one country, two systems" and internationalization, Hong Kong is fully capable of effectively promoting the development of a global RWA tokenization system and becoming a bridgehead for international trade between China and developing countries. If Hong Kong can seize this opportunity, it will surely lead the global trade trend and open up a broader world of economic cooperation between China and the vast developing countries.
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