Caveat: Take what you will from this summary of an RT article. The title: ‘Russia’s divorce from the West has pushed it into China’s arms, here’s how it will work’
The following could spell disaster for the West. The Far East, a growing market of enormous potential could form a powerful alliance with Russia and China. In addition, it could mean the end of SWIFT and the US dollar as the world reserve currency. The IMF is predicting a new global order as well.
A Russian economist, writing on RT, says that as a result of the upheaval in world politics and the Russian embargo – largest since the Cold War – Moscow will reformat the country’s foreign economic relations and its economic model.
He said Beijing will be the only power center to benefit from the Ukraine catastrophe in the long run.
“It is possible that the events in Ukraine will predestine China’s success in opposing the United States,” he writes.
He emphasized that China is solidly in Russia’s camp although neutral on Ukraine. China’s calling for peace but you can’t believe them.
OF COURSE CHINA WON’T SANCTION RUSSIA
The Professor highlights the fact that American statements suggesting China might sanction Russia are delusional.
“American statements about having ‘discussions’ with China about the situation surrounding Ukraine and even of China giving some consideration to Western sanctions are divorced from reality. This is not the first time this situation has occurred. In 2014, President Barack Obama tried to convince the Chinese not to conclude an agreement with Russia on the construction of the Power of Siberia gas pipeline, which was nonetheless signed in May of the same year.”
CHINA IS WORKING ON THE INFRASTRUCTURE TO REPLACE THE WEST IN TRADE
He talks about changes that could isolate the West from the vital imports. It could displace the dollar as the reserve currency.
Russia and China “have so far carried out significant work to put a secure infrastructure in place to ensure bilateral trade. And such efforts have continued until very recently…”
“Preparing for a tough conflict with the West, Russia has sharply increased the share of yuan in its gold and foreign exchange reserves. According to some estimates, the Bank of Russia has $140 billion worth of Chinese government bonds denominated in yuan alone. Indirectly, this may also indicate that the current volume of sanctions has been expected for a long time.”
“In addition, China’s CFETS trading system and the Moscow Exchange have been trading in the yuan-ruble currency pair since 2010. Thus, conditions exist for all trade between the two countries to be shifted to national currencies, mainly to the yuan, due to the volatility of the ruble.”
“… with the EU’s embargo of Russian imports, the process of reorienting to China may slightly accelerate, and China could become Russia’s main trading partner within the next two or three years. As a result, the trade between Russia and its main trading partner will be safe from external influences.”
Russia Was Prepared for These Sanctions and Is Forging New Alliances
Russia has been preparing for this, the professor says, adding “China may eventually replace the European market.”
He said China will accelerate the development of the requisite infrastructure in the Far East.
“China may have significant interest in redirecting Russian raw material exports to itself while converting it to yuan, as this will not only give Beijing numerous political and strategic benefits but also bring it huge economic gains. In particular, China’s protection from sanctions and embargo attempts will sharply increase, the cost of acquired resources will decrease, while the role of the yuan in world trade will dramatically rise (the internationalization of the yuan is an important goal for Chinese policy).”
Russia won’t deal with Japan, South Korea, and Singapore after the sanctioning, he says.
The economist, Dr. Vasily Kashin, sees China replacing the EU as Russia’s main trading partner, in the long run. This could result in the development of Siberia and the Far East. Russia can come out of this embargo “significantly strengthened”, he writes.
A military alliance between Russia and China could also one day take place.
The RT article was written by Vasily Kashin, Political Science Ph.D., Director of Centre for Comprehensive European and International Studies (CCEIS) of Russia’s Higher School of Economics National Research University.