According to Russian President Vladimir Putin, more than 80% of transactions between Moscow and Beijing are conducted in the national currencies of rubles and yuan. This statement highlights the growing economic cooperation between Russia and China and the reducing reliance on the US dollar in bilateral trade.
The use of national currencies in trade between Russia and China is part of a broader trend called de-dollarization, which aims to reduce the dominance of the US dollar in international transactions. Both countries have been actively working towards this goal, seeking to strengthen their economic ties and move away from the traditional reliance on the US currency.
The shift towards using rubles and yuan in bilateral trade has several benefits for both countries. Firstly, it reduces their exposure to the fluctuations and uncertainties of the US dollar, which has been subject to volatility in recent years. By using their own currencies, Russia and China are able to establish more predictable and stable trade relations.
Additionally, using national currencies can help boost economic cooperation between Russia and China by reducing transaction costs. When countries use a third currency like the US dollar, they often incur additional fees and exchange rate risks. By using their own currencies, Russia and China can bypass these costs and facilitate more efficient trade.
Furthermore, the increased use of rubles and yuan in bilateral trade strengthens the economic ties between Russia and China and enhances their economic independence. By reducing their reliance on the US dollar, both countries can assert their sovereignty and promote a multipolar international monetary system.
The growing significance of the ruble-yuan trade is also reflected in the increasing trade volume between Russia and China. In recent years, the two countries have witnessed a steady growth in their bilateral trade, reaching a record high of $108.3 billion in 2020. This demonstrates the success of their efforts to diversify their trade relations and expand their economic cooperation.
Moreover, the use of national currencies in trade with China aligns with Russia’s broader strategy to strengthen its economic ties with Asian countries, particularly those in the Eurasian region. Russia has been actively promoting the use of the ruble in trade with its Asian partners as part of its efforts to integrate and diversify its economy.
In conclusion, the increasing share of rubles and yuan in trade between Russia and China reflects their efforts to reduce their dependence on the US dollar and strengthen their economic cooperation. By using their own currencies, both countries can establish more stable and efficient trade relations, reduce transaction costs, and enhance their economic independence. This trend also underscores Russia’s broader strategy to strengthen its economic ties with Asian countries and promote a multipolar international monetary system. As the bilateral trade volume continues to grow, it is expected that the use of rubles and yuan will further increase in the future.