© AFP Photo/How Hwee YoungRussia's President Vladimir Putin and his Chinese counterpart Xi Jinping
China's foreign minister has pledged support to Russia as it faces an economic downturn due to sanctions and a drop in oil prices. Boosting trade in yuan is a solution proposed by Beijing's commerce minister.
"Russia has the capability and the wisdom to overcome the existing hardship in the economic situation," Foreign Minister Wang Yi told journalists, China Daily reported Monday. "
If the Russian side needs it, we will provide necessary assistance within our capacity."The offer of help comes as Russians are still recovering from the shock of the ruble's worst crash in years last Tuesday, when it
lost over 20 percent against the US dollar and the euro. The Russian currency bounced back the next day, but it still has lost almost half of its value since March.
At his annual end-of-year press conference on Thursday, Vladimir Putin acknowledged the ruble has been tumbling along with the price of oil, and estimated that Western sanctions account for 25-30 percent of the Russian economic crisis. However, the president's economic forecast is that the slump will not be a lasting one.
© Reuters/Carlos Barria
Chinese Commerce Minister Gao Hucheng proposed on Saturday
to expand the use of the yuan in trade with Russia. He said the use of the Chinese currency has been increasing for several years but western sanctions on Russia had made the trend more prominent, Reuters cited Hong Kong's Phoenix TV as saying.
Gao said this year's trade between China and Russia
could reach $100 billion, approximately 10 percent growth compared to last year.
The minister said he did not expect cooperation on energy and manufacturing projects with Russia to be greatly affected by the current crisis.
"Many Chinese people still view Russia as the big brother, and the
two countries are strategically important to each other," Jin Canrong, Associate Dean of the School of International Studies at Renmin University in Beijing, told Bloomberg. "For the sake of national interests, China should deepen cooperation with Russia when such cooperation is in need."© RIA Novosti/Aleksey NikolskyiGazprom’s Power of Siberia pipeline – to deliver 4 trillion cubic meters of gas to China over 30 years – construction commencing September 2014
China has been increasingly seeking deals in its own currency
to challenge the US dollar's dominance on the international market.
And
Beijing is not alone in attempts to counter the influence of Western-based lending institutions and the US currency.
BRICS, the group of emerging economies that comprises Brazil, Russia, India, China and South Africa,
accounting for one-fifth of global economic output, has been pursuing the same goal. The five nations
agreed in July to increase mutual trade in local currencies, and also
to create a BRICS Development Bank with investment equivalent to $100 billion as an alternative to the Western-controlled World Bank.
25-minute interview from 15 Dec 2014. English subtitles.
How and why the Ruble was driven lower. Nikolai Starikov
[Link]
Nikolai Starikov, writer on geo-politics and international finance, explains in detail the mechanisms of the ruble's 2014 fall, the passivity or complicity of the financial authorities, and the end result this is leading to.
Attacks against Russia are happening on multiple fronts, including:
- Sanctions suspending credit lines from abroad;
- Speculators easily manipulating the RUB exchange rates;
- False flag atrocities;
- The oil price determined by OPEC;
- Preparation of a “Patriotic Maidan”.
Starikov claims that all of the above is instigated by Washington to defend the dollar's supremacy and prevent the rise of the Eurasian Economic Union, which officially comes into existence at the beginning of 2015.
Source : [Link]