Dollar dump? Russia & China agree to bilateral trade in national currencies during Putin-Xi meeting

Russia and China took another step away from the US dollar after the two countries agreed to develop bilateral trade using the ruble and the yuan.

It was just one of the major deals reached after the presidents of the two countries, Vladimir Putin and Xi Jinping, held talks in Moscow on Wednesday.

“Russia and China intend to develop the practice of settlements in national currencies,” Putin told journalists at the news conference following the talks. He added that the states have signed intergovernmental agreements on expanding the use of the yuan and the ruble in bilateral financial operations.

A draft government decree on the national currencies trade was released earlier during the day. The document stipulates that Moscow and Beijing will cooperate on development of national payment systems, as well as facilitate cross-border payments in national and other currencies.

During the signing ceremony other major agreements were reached. Russia’s state nuclear company Rosatom and China National Nuclear Power (CNNP) penned a general contract on building the third and fourth units at Xudapu nuclear plant in northeastern China.

It was earlier reported that the deal is worth $1.7 billion and construction is scheduled to begin in October 2021 and August 2022.

In another major deal, inked following the high-level talks, the Russian Direct Investment Fund (RDIF), China’s Alibaba, and Russia’s Mail.Ru Group agreed to invest a total of $382 million into an e-commerce joint venture. Alibaba Group is to provide some $100 million, while the rest will be funded by the Russian side.

The RDIF also signed a deal with China Investment Corporation (CIC) to create a joint scientific innovation fund and invest $1 billion into it.

“We expect that its activities will make a significant contribution to the development and implementation of the most advanced technologies and solutions for the development of the economies of our countries and the further strengthening of our partnership,” RDIF CEO Kirill Dmitriev said.

After the Moscow talks, presidents Putin and Xi Jinping will depart for St Petersburg to take part in Russia’s key annual business event. Dozens of multi-billion dollar deals related to energy, industry, and finance, are expected to be signed during the St. Petersburg Economic Forum, which runs from June 6 to June 8.

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