Russia & China expanding yuan share in mutual trade, pushing out US dollar – Chinese Ambassador to Russia

The share of the Chinese currency in trade between Russia and China has increased, as the countries boost efforts to move away from the US dollar in response to Washington's sanctions policies, according to a top Chinese diplomat.

The yuan's share in the countries' bilateral trade rose from 3.1% in 2014 to 17.5% in 2020, Chinese Ambassador to Russia Zhang Hanhui told news agency Interfax.

According to Zhang, Russia has been steadily following a policy of de-dollarization of foreign trade, expanding the use of Chinese currency for buying financial products denominated in the renminbi and using it as a reserve currency over recent years. He added that the yuan has been gaining recognition from the Russian government, enterprises, and investors.

"These changes show the yuan's inherent advantage and usage potential in the Russian market, marking the impressive progress that China and Russia have made in the diversification of bilateral trade settlement," the ambassador said.

Zhang highlighted that extending local currency settlements is one of the key aspects of financial cooperation between China and Russia, and is seen as conducive to shaping a more flexible and resilient international currency system.

The Chinese yuan accounts for 30.4% of Russia's National Wealth Fund's holdings, and 12.8% of Russia's reserve assets, the ambassador said.

In the first half of 2021, trade turnover between Russia and China totaled $63.08 billion, marking a nearly 30% growth year-over-year. Over the past three years, annual bilateral trade topped the $100-billion mark. The ambassador said he expects Russia-China trade to set a new record in 2021.

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