China urges Russia to increase use of local currency in trade to marginalize USD

0 1,812

BEIJING – Chinese Vice President Wang Qishan called on Russia to strengthen financial cooperation between the two states by increasing the use of national currencies in bilateral trade.

The Chinese politician’s statements are in line with an offer by Russian President Vladimir Putin that suggested that both China and Mongolia join the Russian Central Bank’s financial messaging system and increase the use of national currencies in mutual trade. The president stressed that many countries, specifically Russia, are expressing interest in abandoning the current practice of using the dollar amid instability in global financial markets.

During the St. Petersburg International Economic Forum, Putin criticized the US government for turning the dollar into a tool to pressure other countries. He also urged other states to review the dollar’s current status in light of Washington’s behavior.

BRICS countries, which include both Russia and China, as they reduced the use of the dollar in mutual trade by 20%. In addition, according to the latest report, last year China reduced its share of US Treasury bonds by $ 67.2 billion, down 5.6 percent, while boosting its reserves of gold.

Beijing has been involved in an expensive trade war with the US since 2018, with hundreds of billions of dollars worth of goods being affected by heavy tariffs on both sides. Since the end of last year, the two countries have been negotiating a new trade agreement to end the conflict, but so far this has not worked out.

Meanwhile, the European Union and Russia do not need any contracts to carry out most of the euro transactions, said Thierry Mariani, a French politician and MEP, adding that “anything that puts an end to the dollar’s hegemony is a positive thing.”

- Advertisement -

“It has always seemed surreal to me that large countries, such as European countries or Russia, systematically use the dollar in certain transactions. It also gives Americans an economic and legal weapon because they believe that if their currency is widely used they have the right to act,” the politician said.

Mariani also said that the dollar is giving the US a legal and even criminal opportunity to interfere in various issues.

“One of the main problems today is the extraterritoriality of US law, the use of its currency in particular gives the US the means to intervene legally or even criminally on a wide range of issues. I am one of those who do not understand why, in the face of these sanctions and risks, the use of other currencies does not increase. If this agreement [between the EU and Russia] comes into force, I can only consider it positive. is a declaration of intent, without any concrete mechanism,” concludes the French politician.

Mariani made these comments amid reports that Russia and the EU agreed to set up a working group to make the transition to the use of the ruble and the euro in bilateral deals between European countries and Moscow.

Previously, Russia’s Finance Minister Anton Siluanov announced that he and Maros Sefcovic, deputy chairman of the Energy Commission of the European Union, agreed to create a working group that will transition to the use of the euro and the ruble in payments.

In recent times, several countries are trying to get rid of dependence on the US dollar.

“The dollar is gradually and inevitably losing its share of the global market, not just Russia, but the whole world,” Russian Minister of Economic Development Maksim Oreshkin said on June 6.

Subscribe to our newsletter
Sign up here to get the latest news, updates and special offers delivered directly to your inbox.

Get real time updates directly on you device, subscribe now.

Comments