In a groundbreaking announcement made on the 19th of December, Russian Prime Minister Mikhail Mishustin proclaimed the complete abandonment of Western currencies, including the US Dollar, in the bilateral trade between Russia and China. This significant disclosure unfolded during a meeting with his Chinese counterpart, Li Qiang, in Beijing. Mishustin underscored the prevalence of Rubles and Yuan, asserting their dominance in virtually all transactions.
During his current two-day visit to the Chinese capital, Mishustin accentuated the escalating utilization of national currencies in mutual settlements. He articulated that the proportion of national currencies in bilateral trade, which stood at approximately 20% in the year 2020, has now superseded the usage of currencies from third-party countries entirely.
Booming Business Ties
The Russian Prime Minister underscored the vibrant and flourishing business relations in shedding light on the dynamic economic interconnection between the two nations. He disclosed that the turnover in bilateral trade has significantly surpassed the notable milestone of $200 billion, surpassing initial expectations. Adding to this, Mishustin drew attention to the success of a collaborative business forum in Beijing earlier in the year. The event attracted a considerable gathering of more than 1,500 entrepreneurs from both Russia and China.
Mishustin expressed the meticulous efforts invested in creating favorable conditions for the operations of commercial entities in both the Russian and Chinese markets. He emphasized the expansiveness of their joint agenda, underlining the collaborative strides taken to ensure business operations’ seamless and efficient functioning.
In response, Li Qiang astutely recognized the indispensable nature of the partnership, especially considering the uncertainties prevalent on the global stage. He highlighted the inherent strength and adaptability in the enduring alliance between Russia and China.
BRICS Collaboration and Dollar Ditching
Russia’s strategic move goes beyond its bilateral ties with China. Finance Minister Anton Siluanov urged the BRICS organization, encompassing Brazil, Russia, India, China, and South Africa, to strengthen financial relations and establish settlement mechanisms within the bloc. This appeal was made during the Russia-China Financial Dialogue forum in Beijing, attended by Chinese Finance Minister Lan Foan.
The BRICS group, known for its efforts to counterbalance Western economic influence, is actively exploring ways to enhance financial cooperation and enable payments in local currencies among member nations. Siluanov emphasized the need to develop a payment system independent of existing infrastructure, aligning with the shared goals of individual countries within the BRICS alliance.
As Russia and China lead the charge in abandoning the US Dollar in their trade relations, the global economic landscape witnesses a significant shift. The growing economic cooperation between the two nations sets the stage for increased autonomy in financial transactions, challenging the traditional dominance of Western currencies in international trade.
This move not only solidifies the Russia-China partnership but also underscores the broader BRICS initiative to reshape the financial landscape and reduce dependency on the US Dollar. The coming years are poised to witness transformative changes in global trade dynamics as emerging economies actively pursue alternative financial mechanisms, signaling a paradigm shift away from Western-centric economic structures.