China, Russia quit dollar on bilateral trade

Discussion in 'Economics' started by bearice, Nov 24, 2010.

  1. 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 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 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.
  2. LeeD


    That's a big deal. Currently, Renminbi only officially circulates in mainland China and Hong-Kong and Macau and a few South Asian countries. Only in Hong-Kong it's allowed to open Renminbi bank accounts without being involved in trade with China.

    If Russian companies (and possibly residents) are allowed to open bank accounts in Renminbi, that would be a massive step to China relaxing currency controls.
  3. LeeD


  4. "War on Terror" coming soon to China and Russia.
  5. Comment may have been made in jest but reality is this is a matter of national security. US must preserve the dollar as the world currency at all cost.

  6. LeeD


    Since Putin came to power, Russia has been getting ready mass producing these and preserving these. Geven according to the article the Chinese are buying 2 newest biggest and meanest nuclear reactors, China is getting ready too.

    On a serious note, eliminating US dollar from inter-government contracts (such as the sale of natural gas or 2 aforementioned reactors) is not such a big deal. Private enterprises will keep trading in whatever currency they can and want.
  7. True. Private Industry deals in the strongest currency.

    As a Capitalist, I do not agree with "Exporting" our inflation via manipulation of our dollar. Let the markets set the stage and if the dollar falls on it's own accord than so be it.

    We are exporting the average joes fuck up for getting to much into debt, the Wallstreet clowns bubbles of RE and .Com blow up.

    The World is not going to continue to fund the US.

    With that said, the US is still in far better shape than both Russia and China and China is in a very dangerous position...she could impload as her bubble pops. Of course this could be years or decades from now. No telling when. There is still massive corruption, Manufacturing plants shutting down all over the country side, poverty is huge outside the main cities and she owns a shit ton of our Debt.

    I wouldn't worry to much about this move between China and Russia. Not really big deal economically for the US, just a big FUCK YOU from both countries.
  8. Here people have failed to understand that China and Russia are forming an alliance/group.
    #10     Nov 25, 2010