China and Russia have ushered in a major breakthrough in energy**. In September last year, Gazprom decided to change the payment method for natural gas exports to China from euros and dollars to rubles and yuan, which is considered to be the first time in the history of Chinese and Russian energy ** to settle natural gas in local currency, showing that Russia's trust in the yuan has reached a "new height".
This move will help Russia strengthen its energy exports to China, India and other countries. In addition, the renminbi (RMB) is also increasing in China's cross-border transactions, with RMB accounting for 49% of China's cross-border transactions in the second quarter of 2023, surpassing the US dollar for the first time.
Statistics released by the International Funds Clearing System (SWIFT) in October showed that the renminbi rose to its highest level in the trading system, surpassing the euro to become the second largest currency for the first time in September. Russia's "contribution" to the yuan is believed to have pulled up global demand for this currency.
During his visit to China, Russian Prime Minister Mishustin said that Sino-Russian relations have reached the highest level in history, and the most significant point is that China and Russia continue to expand the proportion of their local currencies in mutual settlements. In 2020 it was about 20%, but this year both countries have actually settled entirely in their own currencies, moving away from third-country currencies.
Russia believes that Moscow currently has only "a very small number of countries that can be trusted", and the renminbi is the most valuable currency among them. Analysts point out that there are two reasons why Russia completely adopts RMB settlement in the bilateral **.
First of all, with the development of the Russia-Ukraine conflict, Russia has repeatedly asked the West for the conditions of "easing sanctions", but these conditions have been ignored, so it is a last resort for them to promote local currency settlement with China.
Second, the Russian side has recognized that even after the end of the Russia-Ukraine conflict, many Western countries that demand Russia to "take responsibility" are still in danger, and if they hold too many euros or dollars, Russia is likely to face a second sanction or confiscation of its currency.