As Russia’s economy gets hammered by sanctions imposed upon by many countries including the US, China has emerged as the key player after it has decided to revert back to its own currency in pursuing trade with Russia.
Amid Moscow’s deepening international isolation, Analyst Tom Fowdy on Thursday opined that the US might have to face long-standing consequences of strategic changes in trade pacts between China and Russia. “Both China and India are reverting to their own currencies in pursuing trade with Russia. The combined population total of these countries is 2.7 billion people. Do the US and its allies realize the long term strategic consequences of this?”
Both China and India are reverting to their own currencies in pursuing trade with Russia. The combined population total of these countries is 2.7 billion people. Do the US and its allies realize the long term strategic consequences of this?— Tom Fowdy (@Tom_Fowdy) March 3, 2022
According to the reports, China has opposed to the sanctions imposed upon Russia by the United States, European Union and has said that it will continue to carry out normal trade cooperation with Moscow. “China and Russia will continue to carry out normal trade cooperation in the spirit of mutual respect, equality and mutual benefit”, said Foreign Ministry spokesman Wang Wenbin at a regular press briefing in Beijing.
He added that economic sanctions are not a solution to the problems, instead, they create new ones. He also demanded that US should not harm the legitimate rights and interests of China and other parties when handling the Ukraine issue and its relations with Russia.
This is specifically after the US moved to disallow certain Russian banks from SWIFT, the payment system used for international financial transactions amid the ongoing war in Ukraine. Western governments are trying to shut off Russia’s economy from the global financial system, pushing international companies to halt sales, cut ties and dump tens of billions of dollars worth of investments.
It is pertinent to note that China and Russia had decided to reduce their dependence on the US dollar before the year 2020 itself. As of 2020, only 46% of the trade between the two countries was recorded in the US dollar as compared to 90% in 2015 and before.
China and Russia have close bilateral ties in trade. According to the reports, trade between Russia and China has recorded a rise of 35.9% last year recording the total trade at $146.9 billion. The two have aimed to boost the total bilateral trade to $250 billion by 2024, as unveiled on the sidelines of the Winter Olympics.