BEIJING (Dispatches) -- China and Oman have signed a $4.47 billion currency swap agreement and agreed to expand cooperation on digital currencies and cross-border payments, marking another step in Beijing’s efforts to promote alternatives to dollar-based financial transactions.
The agreement was signed during Sultan Haitham bin Tarik’s state visit to Beijing. The People’s Bank of China (PBOC) said the five-year arrangement, worth 30 billion yuan ($4.47 billion), equivalent to 1.5 billion Omani rials, would strengthen monetary cooperation and facilitate cross-border payments.
The two central banks also signed a memorandum of understanding on digital payments and central bank digital currencies (CBDCs), opening additional avenues for financial transactions using national currencies.
The development carries significance beyond bilateral banking cooperation. It reflects a broader effort by China and its trading partners to diversify payment mechanisms and reduce their exposure to the U.S. dollar-dominated financial system, particularly as Washington increasingly uses economic sanctions and financial restrictions as instruments of foreign policy.
Oman’s economic relationship with China provides a substantial foundation for the initiative. Bilateral trade reached approximately 9.6 billion Omani rials ($24.9 billion) in 2025, with China accounting for around 23.8% of Oman’s total trade and serving as its largest trading partner. Omani exports to China, including crude oil and other energy products, amounted to 7.7 billion rials.
The currency agreement also comes amid growing international debate over the dollar’s dominance and the potential consequences of Washington’s use of financial leverage. For Beijing, expanding yuan-denominated transactions offers a way to protect trade and investment channels from external financial pressure.
An analysis published by the Asian Development Bank Institute in July 2026 identified rising geopolitical tensions, particularly between China and the United States, as an important factor influencing currency choices in international trade. It noted that emerging economies were increasingly exploring transactions in local currencies, although the dollar remained dominant.
During his talks with Sultan Haitham, Chinese President Xi Jinping also delivered a pointed message concerning Washington’s regional policies and the broader geopolitical environment.
“The Middle East Persian Gulf region should not become an arena for great-power rivalry and geopolitical conflict. Peace and stability in the region require joint nurturing and protection by all parties,” Xi said, according to China’s Foreign Ministry.
The Chinese president reaffirmed Beijing’s readiness to work with Oman and other regional countries to promote peace and stability, while opposing the escalation of geopolitical tensions.
The two countries also witnessed the signing of 16 cooperation documents covering green development, industrial supply chains, artificial intelligence, satellite navigation, science and technology, investment and financial regulation.
China’s diplomatic engagement is expected to continue, with its special envoy for West Asia, Zhai Jun, scheduled to visit Iran, Oman and Saudi Arabia.