Chinese President Xi Jinping has called for an increase in the use of national currencies in trade between members of the Shanghai Cooperation Organization (SCO). Speaking at an SCO summit via videolink from Beijing, President Xi emphasized the importance of expanding mutual economic ties by focusing on various financial instruments.
President Xi stated, “It is necessary to ramp up cooperation in sovereign digital currency and work on the establishment of an SCO development bank.” He expressed China’s readiness to provide its partners with access to Chinese markets and share its experience in this regard.
Russia and China have been taking active measures to replace the US dollar with their respective national currencies in bilateral settlements. The trade between the two nations has witnessed remarkable growth, reaching a historic high of $190.3 billion in annual terms in 2022. Since the beginning of this year, exports and imports have continued to surge at a double-digit pace.
According to customs data, Russia-China trade has soared to $93.8 billion in January-May, marking a 40.7% increase compared to the previous year. Russian Finance Minister Anton Siluanov recently expressed confidence that bilateral trade is on track to surpass the target of $200 billion annually earlier than anticipated.
The 23rd SCO summit, chaired by Indian Prime Minister Narendra Modi, aims to further strengthen the organization’s economic and security bloc. Established in 2001 by the presidents of Russia, China, the Kyrgyz Republic, Kazakhstan, Tajikistan, and Uzbekistan, the SCO welcomed India and Pakistan as permanent members in 2017.
President Xi’s call for increased use of national currencies in trade within the SCO reflects the growing desire among member nations to reduce their dependence on the US dollar and establish more independent financial systems. This move aligns with Russia and China’s ongoing efforts to boost bilateral trade and minimize the impact of external factors.
Furthermore, President Xi’s emphasis on sovereign digital currencies highlights China’s commitment to developing and promoting its digital yuan. As one of the frontrunners in the race for a central bank digital currency (CBDC), China’s push for cooperation in this area could potentially pave the way for increased adoption of digital currencies within the SCO.
By encouraging closer economic ties and promoting the use of national currencies, President Xi hopes to create a stronger foundation for trade and financial cooperation among SCO member nations. This move not only serves the economic interests of China and its partners but also contributes to the goal of reducing reliance on the US dollar and fostering a more multipolar world order.
In conclusion, President Xi’s call for increased use of national currencies in trade within the SCO reflects the evolving economic dynamics in the region. By expanding cooperation in sovereign digital currencies and fostering the establishment of an SCO development bank, member nations can strengthen their economic ties and reduce their dependence on the US dollar. As Russia-China trade continues to grow at an impressive pace, it sets a positive precedent for increased bilateral and multilateral trade within the SCO.
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