Russia and China have agreed to increase the role of the ruble and the yuan in trade payments as well as in bilateral investments and financing. This was one of the results of the historic summit between the two leaders held in Beijing on Friday.
Russian President Vladimir Putin and his Chinese counterpart Xi Jinping have given the green light to greater “growth of Russian-Chinese cooperation in the financial sector, increased participation of national currencies in commercial payments, investment and financing.” In addition, the countries also agreed to “expand collaboration in such areas as payment systems and insurance.”
This is not only an increase in commercial exchange, but also an improvement in its structure, in search of new areas for growth and collaboration. During the summit, the Russian and Chinese allies estimated that trade between Russia and China could reach US $100 billion by the end of the year.
According to Putin and Xi’s joint statement, the two parties also plan to “promote efforts to harmonize strategies, programs and measures to develop national economies as well as particular sectors”.
In addition, the two sides intend to “create a favorable environment for Russian and Chinese enterprises,” foster large projects together, in accordance with the principle of market orientation, to sustainably expand the volume of investment and “create favorable conditions for the issuance of cross-border obligations. ”
The energy collaboration agenda is not limited to the purchase of oil, gas, coal and electricity, but it should also include the exploitation of renewable energy resources, energy efficiency and the provision of energy equipment.
China is Russia’s biggest trading partner, accounting for 15 percent of Russia’s foreign trade last year. Bilateral trade increased 31.5% in 2017, reaching US $87 billion. In recent years, the two countries have promoted agreements on their national currencies in striving to limit the hegemony of the US dollar and promote a multipolar system of international relations and economics.
According to the Bank of Russia, Russian and Chinese companies are now ready to make payments in rubles and yuan. Last year, 9% of Russia’s exports to China were paid in rubles, according to RT. In turn, Russian companies paid 15% of Chinese imports in yuan. Just three years ago, these numbers were 2% and 9%, respectively.
The rise of both Russia and China as superpowers, their geopolitical convergence, and their attempts to create alternative economic integration projects make up one of the single most decisive factors of 21st century international relations, especially contributing to the emergence of a multipolar world system. Putin and Xi’s joint declaration to boost the Russian-Chinese alliance to the “next level” is an immense step in this direction.