China Daily

By Su Qiang and Li Xiaokun
Updated: 2010-11-24 08:02

China, Russia quit dollar 

Premier Wen Jiabao shakes hands with his Russian counterpart Vladimir Putin on a visit to
St. Petersburg on Tuesday.ALEXEY DRUZHININ / AFP

 

St. Petersburg, Russia - 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.


Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.
 

"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 possibilities.


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 communiqu. 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 Moscow has "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 system.


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 on Wednesday.


Agencies and Zhou Wa contributed to this story.





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Please someone pick a prayer day. We all need a day of prayer so that we can all pray together at the same time. .
This looks just about right for what he and his puppet masters have in mind for our "future", except I don't see the death camps in the photo...
Some things to consider. Russia's and China's currency are both fiat currencies - as is the dollar. That means it is not backed by a commodity like gold or silver, but only on the full faith of the respectice government to honor its perceived value. Which means it is wothless if perceived so by the global economy. Also, these two nations have a long history of distrust and dislike for each other. So do you think the people will feel more comfortable with the dollar, or with ruble and yuan? No time to panic.
Excellent points Mike........

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