During Mishus's visit to China, the Russian Prime Minister announced a series of exciting good news.
Relations between China and Russia have reached an all-time high, with the two countries continuing to increase the share of their currencies in bilateral settlements, and in fact avoiding the use of third-country currencies altogether this year, Mishus said on February 19.
This is definitely a big piece of news, and if the whole world follows the example of China and Russia, the United States** will be very frustrated.
Mishus said that Sino-Russian relations have reached an all-time high, and the two countries continue to promote the increase in the share of local currencies in bilateral settlements. This is the strategic goal set by the two heads of state for China and Russia at the time of the meeting, and it seems that everything is going smoothly at present.
According to the customs officials of the two countries**, the amount of China and Russia** will exceed 200 billion US dollars in 2023. According to data released by the General Administration of Customs of China, the amount of ** in the two countries increased by 267%, reaching a record of about 2,181$800 million.
It is surprising that such a huge amount of ** is actually settled in local currency.
China has been promoting cross-border local currency settlement, and China and Russia have jointly established a model of local currency settlement.
So what are the benefits of local currency settlement compared to using US dollar settlement?
First, for some developing countries, over-reliance on the dollar could lead to a crisis of currency mismatch.
As a rule, a country's liabilities are denominated in dollars and assets are denominated in national currency, and everything should be balanced.
However, if the capital market fluctuates and the national currency depreciates, making it impossible to convert into US dollars, it may trigger a capital panic.
Second, the country bears the huge costs, while the United States makes easy money.
For example, when our goods arrive in various countries by sea, international ** organizations and logistics companies charge intermediary fees, and these intermediary fees must be paid in US dollars.
Moreover, shifting the risk to other countries whenever the US domestic economy is in trouble, a practice that relies on the hegemony of the dollar.
Without the hegemony of the dollar, the hegemony of the United States would have ceased to exist long ago.
According to regional data released by the Central Bank of Russia, in October, when Russia exported to Asia, 346% in rubles and 44% in the currencies of friendly countries;When imported from Asia, 238% in rubles, 562% is settled in the currencies of friendly countries.
The proportion of currencies of friendly countries in Russia's imports and exports** is higher than that of the ruble, due to the risk of instability in the Russian ruble.
Russia is still at war, which makes it very difficult to promote the ruble in wartime.
But China can. China's implementation of RMB settlement has been recognized around the world.
At the beginning of this year, China and Brazil signed a memorandum of cooperation to establish a RMB clearing arrangement in Brazil, and the two sides agreed to no longer use the US dollar as an intermediary currency, and will use local currency settlement in the future**.
After the signing of the memorandum of understanding, the prospects for cooperation between China and Pakistan suddenly became clear, and the amount of cooperation between the two countries also increased rapidly.
To sign a memorandum of understanding on local currency settlement, the two countries must build mutual trust, and only by trusting each other and being optimistic about each other's development can local currency settlement be smoothly promoted.
Looking back at 2023, it is clear from China's diplomatic interactions with other countries that China is trying to show its demeanor as a great power.
It is believed that with the promotion of China, the dollar will eventually withdraw from the stage of history!