China and Russia have reduced their dependence on the US dollar since 2020
China and Russia have reduced their dependence on the US dollar since 2020

China and Russia have reduced their dependence on the US dollar since 2020

As Russia’s economy is hit by sanctions imposed by many countries, including the United States, China has emerged as key player after it has decided to return to its own currency to pursue trade with Russia.

Amid Moscow’s deeper international isolation, analyst Tom Fowdy said on Thursday that the United States may have to face the long-term consequences of strategic changes in the trade pacts between China and Russia. “Both China and India are returning to their own currency to pursue trade with Russia. The total population of these countries is 2.7 billion people. Do the United States and its allies realize the long-term strategic consequences of this?”

According to reportsChina has opposed the sanctions imposed on Russia by the United States and the European Union, and has said it will continue to pursue normal trade cooperation with Moscow. “China and Russia will continue to conduct normal trade cooperation in a spirit of mutual respect, equality and mutual benefit,” Foreign Ministry spokesman Wang Wenbin said at a regular press briefing in Beijing.

He added that financial sanctions are not a solution to the problems, instead they create new ones. He also demanded that the United States not harm the legitimate rights and interests of China and other parties when dealing with the Ukraine issue and its relations with Russia.

This is specifically after the United States moved to exclude certain Russian banks from SWIFT, the payment system used for international financial transactions in the midst of the ongoing war in Ukraine. Western governments are trying to shut down Russia’s economy from the global financial system, pushing international companies to halt sales, cut ties and dump investments worth tens of thousands of dollars.

It is pertinent to note that China and Russia had decided to reduce their dependence on the US dollar before the year 2020 itself. From 2020, only 46% of trade between the two countries was recorded in US dollars compared to 90% in 2015 and before.

China and Russia have close bilateral trade ties. According to reports, trade between Russia and China recorded an increase of 35.9% last year, recording total trade of $ 146.9 billion. The two have it charged to increase total bilateral trade to $ 250 billion by 2024, as revealed on the sidelines of the Winter Olympics.

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