November 24, 2010
China and Russia have decided to renounce the US
dollar and resort to using their own currencies for bilateral trade, Premier
Wen Jiabao and his Russian counterpart Vladimir Putin
announced late on Tuesday (November
24, 2010) in St. Petersburg.
Chinese experts said the move reflected closer relations between Beijing and
Moscow and is not aimed at challenging the dollar, but to protect their
"About trade settlement, we have decided to
use our own currencies," Putin said at a joint news conference with Wen
in St. Petersburg.
The two countries were accustomed to using other
currencies, especially the dollar, for bilateral trade. Since the financial
crisis, however, high-ranking officials on both sides began to explore other
The Yuan has now started trading against the Russian Rouble in the Chinese
interbank market, while
the Renminbi will soon be allowed to trade
against the Rouble in Russia, Putin said.
"That has forged an important step in
bilateral trade and it is a result of the consolidated financial systems
of world countries," he said.
Putin made his remarks after a meeting with Wen.
They also officiated at a signing ceremony for
12 documents, including energy cooperation.
The documents covered cooperation on aviation, railroad construction,
customs, protecting intellectual property, culture and a joint communiqué.
Details of the documents have yet to be released.
Putin said one of the pacts between the two countries is about the purchase
of two nuclear reactors from Russia by China's Tianwan nuclear power plant,
the most advanced nuclear power complex in China.
Putin has called for boosting sales of natural resources - Russia's main
export - to China, but price has proven to be a sticking point.
Russian Deputy Prime Minister Igor Sechin, who holds sway over
Russia's energy sector, said following a meeting with Chinese
representatives that Moscow and Beijing are unlikely to agree on the price
of Russian gas supplies to China before the middle of next year.
Russia is looking for China to pay prices similar to those Russian gas giant
Gazprom charges its European customers, but Beijing wants a discount. The
two sides were about $100 per 1,000 cubic meters apart, according to Chinese
officials last week.
Wen's trip follows Russian President Dmitry Medvedev's three-day
visit to China in September, during which he and President Hu Jintao
launched a cross-border pipeline linking the world's biggest energy producer
with the largest energy consumer.
Wen said at the press conference that the partnership between Beijing and
"reached an unprecedented level" and pledged
the two countries will "never become each other's enemy".
Over the past year,
"our strategic cooperative partnership
endured strenuous tests and reached an unprecedented level," Wen said,
adding the two nations are now more confident and determined to defend
their mutual interests.
"China will firmly follow the path of peaceful development and support
the renaissance of Russia as a great power," he said.
"The modernization of China will not affect other countries' interests,
while a solid and strong Sino-Russian relationship is in line with the
fundamental interests of both countries."
Wen said Beijing is willing to boost cooperation
with Moscow in Northeast Asia, Central Asia and the Asia-Pacific region, as
well as in major international organizations and on mechanisms in pursuit of
a "fair and reasonable new order" in international politics and the economy.
Sun Zhuangzhi, a senior researcher in Central Asian studies at the
Chinese Academy of Social Sciences, said the new mode of trade
settlement between China and Russia follows a global trend after the
financial crisis exposed the faults of a dollar-dominated world financial
Pang Zhongying, who specializes in international politics at Renmin
University of China, said the proposal is not challenging the dollar, but
aimed at avoiding the risks the dollar represents.
Wen arrived in the northern Russian city on Monday evening for a regular
meeting between Chinese and Russian heads of government.
He left St. Petersburg for Moscow late on Tuesday and is set to meet with
Russian President Dmitry Medvedev