Russian Currency Exchange to open

[Andy Nguyen]

Ruble-Renminbi Trading to Start in Russia - NYTimes.com

MOSCOW — Russia and China are poised to take a small but symbolic step in their expanding economic relationship, a move that in the long term could make the dollar less relevant to business between the two nations.

On Wednesday, a Moscow securities exchange is scheduled to open direct trading between the Chinese currency, the renminbi, and the Russian ruble. If the market develops, it could eventually cut the dollar out of a portion of Russian and Chinese trade.

 

[bigbadwolf]

It's been on the cards since the Yekaterinburg pow-wow last year. Here is an informative RT interview with Michael Hudson. Military and geopolitical realities interact intimately with financial realities such as the value and acceptance of the dollar.

 

[Anthony DeAngelis]

Just make sure not to let the Chinese produce any Russian military jets. . .


Russia and China getting close. Good for them. Neither currency is ready to supplant the dollar as the worlds reserve currency and until Russia's economy gets stronger the Chinese will still depend on the USA.

Putin just wants to wrestle a Panda or something.

 

[const451]

Just make sure not to let the Chinese produce any Russian military jets. . .

Chinese have been making those for awhile...

China Clones, Sells Russian Fighter Jets - WSJ.com

 

[tylor]

can anyone put an approximate value on trade between the two countries? or perhaps even data on chinese exports, and % of exports to foreign countries?

this is interesting to think about..

 

[Stuart Truax]

can anyone put an approximate value on trade between the two countries? or perhaps even data on chinese exports, and % of exports to foreign countries?

this is interesting to think about..

For 2005, total trade between the two countries topped $30 billion http://www.silkroadstudies.org/new/docs/publications/2007/Norling_China_and_Russia.pdf.

For 2007, total trade of around $40 billion http://www.users.globalnet.co.uk/~chegeo/.

China's trade with the world as a whole was $2.1 trillion in 2007 ($1.2 trillion of which was exports). Russia doesn't even rank amongst China's top ten trading partners. http://www.uschina.org/statistics/tradetable.html.

These should probably be checked with stats from World Bank, etc.

 

[bigbadwolf]

this is interesting to think about..

Russian raw materials (including oil and gas) and weapons to China; Chinese finished products to Russia. Trade isn't large. In the broader geopolitical context, Bobo Lo wrote a useful book a couple of years back, titled Axis of Convenience. A review can be found here. An excerpt:

China and Russia talk about being strategic partners, but neither actually is central to the other's concerns. China's indispensable partner is the United States; Russia's is Europe or, more specifically, Germany. In 2007, Chinese-Russian trade reached $48 billion, up from $5.7 billion in 1999, making China Russia's second-largest trading partner after the European Union. But current Russian-EU trade exceeds $250 billion -- the lion's share of it being between Russia and Germany -- and Chinese-U.S. trade exceeds $400 billion. China and Russia, Lo demonstrates, "pay far more attention to the West than they do to each other." Their relationship is opportunistic. As Lo puts it, the two giants "share neither a long-term vision of the world nor a common understanding of their respective places in it."

In addition -- and this is the most important aspect of Lo's argument -- whatever opportunity does exist in the relationship, China is in a better position to exploit it. China extracts considerable practical benefits in oil and weapons from Russia. In return, Beijing flatters Moscow with rhetoric about their "strategic partnership" and coddles it by promoting the illusion of a multipolar world. In many ways, the Chinese-Russian relationship today resembles that which first emerged in the seventeenth century: a rivalry for influence in Central Asia alongside attempts to expand bilateral commercial ties, with China in the catbird seat. Lo politely calls this incongruity an "asymmetry."

According to Lo, the terms of Chinese-Russian trade "are becoming more unbalanced every year" -- so much so that he compares the role of Russia for China to that of Angola, China's largest trading partner in Africa. Russia will remain important as long as the weapons and fossil fuels keep flowing (and no economically viable alternatives to hydrocarbons emerge). Lo does not say so explicitly, but in an imagined multipolar world, Russia looks like a Chinese subsidiary. China treats Russia with supreme tact, vehemently denying its own superiority -- a studious humility that only helps it maintain the upper hand.

 

[ThinkDifferent]

nice. dollar is going down the drain. slowly but surely.