95% of bilateral trade between China and Russia is settled in local currencies


Published:

2023-11-27

95% of bilateral trade between China and Russia is settled in local currencies

Russian First Deputy Prime Minister Andrei Belousov said that nearly 95 percent of bilateral trade between Russia and China is settled in rubles and renminbi.

Experts explained that against the backdrop of Western restrictions, Moscow and Beijing began to use more of their own currencies instead of the dollar and euro to minimize risks. Meanwhile, according to government estimates, trade between the two countries will exceed $200 billion for the first time this year and is expected to increase to $300 billion by 2030. Experts point out that Russia mainly supplies energy and agricultural products to China, while buying cars, equipment and electronics from China.

Belousov said: "Relations between Russia and China are at an unprecedented high level and will continue to develop in an all-round way. It is based on a solid foundation of mutual respect, equality and mutual trust, non-interference in internal affairs, and promoting mutual development and prosperity."

It is worth noting that in 2013-14, Moscow and Beijing settled only 2 to 3 percent of their mutual trade in their national currencies. This will increase to 24 to 25 percent in 2020 and 50 percent in 2022.

Russian Deputy Minister of Economic Development Vladimir Ilichev said that in the context of the unprecedented sanctions policy adopted by the United States and the European Union, Russia and China began to actively use their own currencies instead of the dollar and the euro.

"Western countries have passed round after round of sanctions, which has reduced the number of interbank current accounts, companies and financial institutions that can settle in dollars and euros," Ilichev noted in June. Russian entrepreneurs actively use RMB and ruble through various schemes and combinations... We now settle not only with China in renminbi, but also with many other countries."

Russian Finance Minister Anton Siluanov said: "Like Russia and China, other countries are starting to settle more and more in their own currencies or in the currencies of friendly countries that they trust."

Natalia Milichakova, senior analyst at Global Free Finance in Russia, said: "When it comes to settlement in Moscow and Beijing, many Russian banks have already disconnected from SWIFT(Society for Worldwide Interbank Financial Communication), so both sides now settle trade in local currency through their own payment systems. At the same time, because of China's demand for Russian energy, we see a steady increase in bilateral trade."

According to China's General Administration of Customs, trade between China and Russia rose 27.7 percent from January to October this year, reaching $196.5 billion. Among them, China's imports from Russia reached US $106.4 billion, up by more than 12%. China's exports to Russia reached $90.1 billion, up 52%.

Russia's Federal Customs Service predicts that trade between Russia and China will cross the $200 billion mark this year, reaching about $215 billion to $220 billion. The government's assessment is similar. At the same time, the Russian government does not rule out the possibility of an additional 50 percent increase in bilateral trade in the next seven years.

Belousov said: "China is our key partner in the field of trade and investment. Bilateral trade has increased by a third since the beginning of 2023. We estimate that by the end of this year, we will have crossed the $200 billion threshold, which was originally scheduled to be reached in 2024. By 2030, it will be heading towards $300 billion."

Against the backdrop of various restrictions imposed by the United States and the European Union and the departure of many European and American companies from Russia, Russia-China trade increased by more than 29 percent to a record $190.3 billion in 2022.

"As a result of the withdrawal of some Western companies from the Russian market, new opportunities for Chinese partners to participate in large Russian oil and gas, petrochemical, automotive, consumer goods, glass and building materials companies have begun to emerge," Belousov added.

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