Putin is strengthening the yuan’s role as Russia’s foreign currency of choice

Xi and Putin are in the midst of high-stakes talks in Moscow.
Xi and Putin are in the midst of high-stakes talks in Moscow.
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For his nation’s businesses in the global market, Russian president Vladimir Putin endorsed the yuan as the currency of choice on the second day of Chinese president Xi Jinping’s visit to Moscow.

The two world leaders signed 14 economic agreements on March 21, covering everything from scientific cooperation to joint production of television programs, as they look to counterbalance the US dollar’s worldwide dominance.

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In a joint statement announcing the agreements, China and Russia said their alliance was not “confrontational in nature and...not directed against third countries.” The leaders also called for an “acceleration of the process of establishing a multipolar world order.”

Putin specifically mentioned the Chinese currency in the context of Russian investments in the developing world.

“We are in favor of using the Chinese yuan for settlements between Russia and the countries of Asia, Africa, and Latin America,” Putin said. “I am confident that these forms of settlement in yuan will develop between Russian partners and their counterparts in third countries.”

China has been an economic lifeline for Russia during international sanctions stemming from its invasion of Ukraine, with Beijing agreeing to buy oil and gas exports from the isolated country, though at a discounted rate.

Xi’s attempts to enshrine the yuan as a worldwide currency are part of the Chinese government’s aim to become more involved in global economic and political affairs.

Last week, Xi negotiated a peace treaty between Saudi Arabia and Iran, with the goal of helping end a proxy war in Yemen. In related news, Saudi Arabia is considering selling oil to China for yuan instead of dollars.

In global monetary reserves, the dollar still reigns supreme


Xi remains tight-lipped about Ukraine

There was little update on China’s 12-point proposed peace plan for Ukraine that Xi outlined last month, with Ukraine itself barely mentioned during the joint press conference between the leaders.

Instead, Putin and Xi focused on familiar accusations of overreach by NATO into the East, saying that US hegemony undermines global stability. The criticism had parallels to Putin’s comments about the yuan, namely that Russia and China will do everything they can to prevent a unipolar world order, both geopolitically and economically.

Putin did mention China’s peace plan, saying that the West’s dismissal of it showed NATO isn’t serious about finding a peaceful resolution to the war.

“We believe that many of the provisions of the peace plan put forward by China are consonant with Russian approaches and can be taken as the basis for a peaceful settlement when they are ready for that in the West and in Kyiv,” Putin said. “However, so far we see no such readiness from their side,”

Xi didn’t say anything specific in response to Putin’s endorsement. When asked directly about the conflict, Xi said that China remains“impartial.”

Meanwhile, Ukraine has welcomed Chinese involvement in the peace process, with president Volodymyr Zeleksnyy recently saying he looks forward to a potential meeting with Xi.

Related stories:

🇮🇷 Saudi Arabia and Iran agreed to restore trade and diplomatic ties in a deal brokered by China

🇨🇳 Why it matters if Saudi Arabia sells oil in Chinese yuan instead of US dollars

🛢️ Xi Jinping’s visit to Saudi Arabia is bad news for the Kremlin

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