New institutions to come in two years to cater Russian-Chinese economy
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These institutions serve to benefit other nations as well, if they seek interest in effective and safe payment mechanisms, according to Wong.
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Russian President Vladimir Putin and Chinese President Xi Jinping at a reception in Moscow, Russia on March 21, 2023 (Reuters)
Vice Chairman of the Shanghai Center for RimPac and International Studies and Valdai Discussion Club expert, Nelson Wong, relayed to Sputnik on Friday that the increasing heights of economic cooperation between China and Russia will require the assistance of special financial institutions that will be established potentially within the next two years.
"Let's look at the investment... I am expecting, personally, that to have a project like this big to be achieved, to be realized, you need financial institutions. Financial institutions that cater specifically for the promotion of such initiatives. So, I won't be surprised if, 12-24 months down the line, there will be investment funds established specifically for such initiative," Wong said during the interview.
These institutions serve to benefit other nations as well, if they seek interest in effective and safe payment mechanisms, according to Wong, who added that unfortunately, some Chinese firms are unaware of the ability now to trade with other Russian partners in yuans and rubles.
Just last month, Russian President Vladimir Putin said his country supported the usage of the Chinese yuan in settlements between Russia and Asian, Latin American, and African states. According to Putin, "these forms of settlements will take place in yuan between Russian partners and colleagues from third countries."
Read next: Russia-China trade hits new record despite sanctions, blackmail: Putin
That is one of the reasons why these institutions need to be promoted and informed about among business communities.
Last week, Putin and Chinese President Xi Jinping signed two joint strategic documents aiming to boost the two global powers' economic and diplomatic partnership.
It is also worth noting that China and Russia lately vowed to increase cooperation and increase multilateralism through various existing multilateral mechanisms such as BRICS, the Shanghai Cooperation Organization (SCO), and G20 platforms.
As an alternative to the traditional commodity trade, Wong expressed that investment cooperation would prove better for good economic relations between both nations as things continue to change.
Following Xi's visit to Moscow last month, Chinese firms have been showing interest in the Russian market and many of these firms have been establishing factories in Russia, according to Wong.
The trade between both nations just in the first quarter of 2023 jumped by 38.7% to $53.8 billion, per data derived from the Chinese General Administration of Customs on Thursday.
The ambitions to end what China and Russia regard as America's economic and geopolitical hegemony further strengthened the diplomatic and economic ties.
Read more: China to never accept US pressure on ties with Russia: Beijing
This is particularly expressed by the two countries employing their national currencies and gold to carry out trades. Expanding that practice to other world economies is further threatening the American dollar's status as the world's dominant reserve currency.
