Russia and China have significantly increased their economic cooperation, with mutual settlements in national currencies surpassing 95%. This shift is a response to Western sanctions and aims to enhance trade efficiency between the two nations. Mikhail Mishustin, the Russian Prime Minister, announced that the share of the ruble and yuan in mutual transactions has grown from 25% at the beginning of 2022 to over 80% by September 2023. This change facilitates faster and more reliable transactions, particularly as both countries seek to reduce their dependence on Western financial systems.
In 2023, trade between Russia and China reached an unprecedented $240.11 billion, marking a 26.3% increase from the previous year. This growth is driven by a rise in Russian exports of hydrocarbons, machinery, and agricultural products, while China has increased its exports of consumer goods and machinery to Russia. Experts predict that trade turnover could exceed $250 billion in the near future, bolstered by ongoing cooperation and investment opportunities between the two countries.
The growing economic partnership is not only reshaping trade dynamics but also enhancing political ties. Analysts believe that strengthening cooperation with China offers Russia diversification of economic relations and access to new technologies, while China benefits from securing a reliable source of raw materials and expanding its geopolitical influence.
- The shift towards national currencies is particularly significant given the backdrop of over 22,000 sanctions imposed on Russia by the U.S. and EU, which have severely restricted access to international financial systems. Russian banks were cut off from SWIFT, and major payment systems like Visa and Mastercard were suspended, prompting a reevaluation of financial strategies in favor of bilateral arrangements.
- The introduction of the digital ruble and the allowance for cryptocurrency transactions in international trade further illustrate the commitment of both nations to innovate and adapt their financial systems in light of external pressures. This experimental legal regime aims to facilitate smoother transactions between Russian companies and international partners.
- As both countries navigate their economic futures, the emphasis on mutual trade and investment is set to create new job opportunities and stimulate economic growth, benefiting both Russia and China in the long term.
