What is the significance of the Russian Prime Minister's statement that "this year, Sino-Russian trade settlements have completely moved away from third-country currencies"? Can other countries or organizations learn from this?

To be honest, this is far from enough, and there are still significant barriers in actual trade.

The Renminbi Cross-Border Payment System (CIPS) has not fully played its expected role. Many Russian banks have not yet joined this system, and there are also obstacles within China.

When it comes to remittances from Russian clients in Renminbi, only Bank of China, Industrial and Commercial Bank of China, and Zhejiang Chouzhou Bank can receive them domestically.

Furthermore, in order to facilitate a smooth remittance, contracts, invoices, customs declarations, and bills of lading are required. Banks also need to verify and go through layers of approval.

Ultimately, this is because the United States has imposed sanctions on companies doing business with sanctioned Russian enterprises, which creates a ripple effect.

Moreover, information messages for cross-border Renminbi transactions still primarily rely on SWIFT, which can be tracked by the United States.

This time, the sanctions against Russia by Europe and the United States exceed 5,000 items, and some sanction lists automatically expand. For example, there is the 50% rule in the SDN list, which means that if entities listed in the SDN list collectively own more than 50% of a particular enterprise, that enterprise will automatically be included in the sanctions list.

These expanded lists often require professional databases for reference. If companies do not rigorously screen, they may unintentionally engage in commercial activities with sanctioned entities, leading to secondary sanctions.

Therefore, when domestic companies choose Russian clients, they either need to avoid dealing with sanctioned companies or resort to cash transactions to bypass the global banking settlement system.

In fact, this is a widespread issue that requires special attention.

I have friends engaged in foreign trade who have encountered such situations. They originally received cross-border Renminbi from Russian clients through corporate personal accounts, but when they tried to deposit the funds at China Merchants Bank in China, they were unable to do so, and the payment was returned to the sender, making it impossible to receive payment.

When engaging in cross-border trade with Russia, it is essential to note that if the client company is sanctioned, Renminbi cannot be received through banks.

Escaping from the Third-Country Currency: The U.S. Dollar

However, this was not Russia’s original intention but rather a forced move.

After the Russia-Ukraine war, many Russian banks were prohibited from using the SWIFT system, and over 300 billion US dollars of overseas assets were confiscated. Crucially, a myriad of sanctions severed Russia’s trade ties with Western countries.

On one hand, the prohibition on importing oil from Russia is well known, given the world’s current oil-US dollar system. In other words, Russia cannot exchange oil for dollars from the West. On the other hand, even if you have dollars, due to the sanctions, you can’t buy what you need. So, what good is having dollars?

After encountering obstacles in the West, Russia had no choice but to turn to the East.

China needs Russian energy, and Russia requires Chinese industrial products. With the help of the East, a perfect match was made.

Now, both China and Russia can settle their trades using their own currencies through systems like the Renminbi payment system. Moreover, Russia can also use the Renminbi for trade settlements with other countries.

The First Deputy Prime Minister of Russia stated that as of now, nearly 95% of bilateral trade between Russia and China is settled in Rubles and Renminbi.

In other words, the Western sanctions did not achieve their intended effects; instead, they provided a dowry for others. On one hand, Russia escaped from the sanctions and abandoned the use of the dollar. On the other hand, it’s also beneficial for China. Russia earns Renminbi from selling oil and can use it to buy goods in China or from other countries. This has played a significant role in promoting the internationalization of the Renminbi.

So, it’s a win-win situation for China and Russia. However, for the U.S. dollar, it’s not a favorable development.

Just a decade ago, from 2013 to 2014, only 2% to 3% of China-Russia trade was settled in Renminbi or Rubles, with the other 97% using dollars, euros, and other currencies. By 2020, the share of Renminbi and Ruble settlement in China-Russia trade had reached 24% to 25%. Today, nearly 95% of China-Russia trade is settled in Renminbi or Rubles, marking a historic milestone.

As the proportion of local currency settlement in China-Russia trade continues to grow, it greatly facilitates trade between the two countries and promotes rapid growth. From January to October 2023, China-Russia trade increased by 27.7% year-on-year, reaching $196.5 billion, with China importing over $106.4 billion from Russia, an increase of over 12%, and exporting $90.1 billion to Russia, a 52% increase. The total China-Russia trade in 2023 could reach $220 billion, and by 2030, it could exceed $300 billion or even more.

Currently, China has a trade deficit with Russia, but it is advantageous for us. This is because our major purchases from Russia are commodities like oil and energy, tangible and substantial goods. The surplus money that Russia earns is in Renminbi, which can be used to buy goods worldwide, further promoting the internationalization of the Renminbi.

I wonder if the United States intended for this favorable outcome.

This time, let’s not discuss whether it makes sense or not, but rather, let’s talk about the topic that any country or organization might learn from. The first country that comes to mind is India, indeed, India.

According to data from the Indian Ministry of Commerce and Industry, in the first eight months of this year, Russia-India trade reached a record-breaking $43.8 billion, with India importing $41.2 billion and exporting $2.6 billion. In other words, Russia earned a significant amount of Indian Rupees. Why not US dollars? Well, because of the sanctions imposed by the West.

In May, Lavrov stated that Russia had billions of rupees that it couldn’t spend, and now they probably have even more. What can you buy with so many rupees?

1. India doesn’t have the goods that Russia needs domestically. Even if they did, it wouldn’t compare to super-sized orders like oil and military equipment.

2. Other countries don’t accept rupees, so Russia can’t use them for trade with other nations.

3. Exchanging for US dollars or euros at a low rate can consume some rupees, but Russia can’t use these currencies right now.

4. Exchanging for Chinese Renminbi might be possible, but India isn’t very willing. One reason is that India already has a trade deficit with China, and second, it may hurt India’s pride.

Russia says the rupees are entirely unused. In this situation, how can they settle trade with India in the local currency?

Besides China and India, which non-Western country has such a large economic capacity for Russia to settle in the local currency? There’s none.

At this moment, we are all steadfast supporters of NATO, and we are all friends of Ukraine. Personally, I firmly support the proposal put forward by Zelenskyy to increase the military by 300,000 to 500,000 troops. We must launch a decisive counterattack against the aggressor. NATO must deploy more weapons in Finland to keep Russia awake at night, and the contradictions between NATO and Russia must persist. NATO, keep going. Zelenskyy, keep going. Ukraine, keep going!!! Ukrainian brothers, let’s give it one more push this winter, please.

So, from the perspective of China, a bleeding but not dying Russia is the best Russia. Since Russia became deeply embroiled in the Russia-Ukraine war, many projects that were previously deadlocked between China and Russia have made significant progress.

For example, the Sino-Russian-Kyrgyzstan railway, which Russia had blocked for 25 years, can finally begin construction in 2023. Moreover, the railway will use the same standard gauge as China, not the Russian broad gauge.

Furthermore, Jilin Province can increase its role as a transit hub for cross-border transportation of domestic goods to Russia’s Vladivostok port.

And now, the Russia-China trade has effectively been de-dollarized, with the share of payments in their respective national currencies exceeding 80%.

All of this has happened in 2023, especially after Russia experienced the Ukrainian counteroffensive and the Wagner rebellion.

From Russia’s perspective, they were initially reluctant to use the Renminbi extensively. For this reason, Russia has been floating the idea of creating a single common currency for the BRICS countries. However, after the assassination of their ally India, Russia began to understand that, under the insane sanctions imposed by the West, the key is not how much currency they hold but how much they can buy. So, this Russia-China trade actually received Putin’s approval in July this year, with the share of payments in their national currencies exceeding 80%:

Putin said that over 80% of China-Russia trade is settled in Renminbi and Rubles. What signals does this release? - Zhihu

For Russia, giving up the US dollar is not a difficult decision. Because the US and euro assets held by Russia can be confiscated at any time, they constantly live in fear and have no choice but to abandon the euro and dollar.

After the Russia-Ukraine war broke out, the United States directly announced that the US Treasury bonds held by the Russian Central Bank and Russian companies were invalid and became a pile of waste paper. The Russian Central Bank’s $2.4 billion worth of US Treasury bonds turned into nothing. According to Russian media reports, the Swiss government has frozen $8.1 billion worth of Russian assets. Previously, one of Switzerland’s large banks, Credit Suisse Group, had frozen $17.6 billion Swiss francs (over $19 billion) worth of Russian assets, accounting for one-third of all Russian assets held by individuals and legal entities in Switzerland.

China-Russia trade actually controls two foundations of US dollar hegemony: oil, which China can purchase from Russia with Rubles, and industrial goods, which Russia can purchase with Renminbi.

The key point is that there are not many currencies that Russia can choose to buy things worldwide. According to data from the International Monetary Fund (IMF) released on March 31, 2022, in the fourth quarter of 2022, the Renminbi accounted for 2.69% of the COFER, ranking fifth in the world. The US dollar accounted for 58.36% of global foreign exchange reserves, still the largest reserve currency held by major central banks worldwide, followed by the euro (20.47%), the Japanese yen (5.51%), and the British pound (4.95%). Among these, whether it’s the US dollar, yen, euro, or pound, they are all part of the G7, and sanctions against Russia by the West are a given. It doesn’t make much sense to obtain their currencies for trade. So, choosing the Renminbi is a natural choice.

According to statistics released by the General Administration of Customs on December 7th, in January to November 2023, the total trade volume between China and Russia reached $218.176 billion, exceeding $200 billion for the first time in history.

According to the statistics, in January to November 2023, the China-Russia trade volume was $218.176 billion, a year-on-year increase of 26.7%. Among them, China’s exports to Russia were $100.336 billion, an increase of 50.2%, and China’s imports from Russia were $117.840 billion, an increase of 11.8%.

In addition, China is one of the few countries that can withstand the pressure from Europe and the United States:

Reuters reporter: The Financial Times reported that the EU plans to impose sanctions on seven Chinese companies accused of selling equipment that could support Russia’s invasion of Ukraine. What is China’s response to this? Wang Wenbin: We have noticed the relevant reports. China firmly opposes illegal sanctions or “long-arm jurisdiction” against China under the pretext of China-Russia cooperation. On the issue of Ukraine, China

Here is the translation of the provided paragraphs into English:

---

Reposting it again.

The complementarity between China and Russia is incredibly strong. If both countries could genuinely unite, there would be no issue with U.S. hegemony.

The first major winner of the Russia-Ukraine war is Russia, although it has paid an extremely heavy price.

Seizing the strategic opportunity and taking the initiative, Russia has virtually dismembered Ukraine, occupying 20% of its most valuable territory and more than half of its coastline, gaining nearly ten million ethnic Russians. If they hadn’t acted, the consequence would have been an enemy state with forty million people a few hundred kilometers away from Moscow.

With one step in and one step out, how much has Russia gained?

The likely outcome of this Russia-Ukraine war is that Russia will take control of most of the four eastern Ukrainian provinces and Crimea. The situation on the battlefield will continue to stalemate, and economically, Russia will endure long-term Western sanctions and blockades.

In any case, taking control of these eastern Ukrainian provinces retains hope for the revival of the East Slavic people in a cruel world. Considering the pros and cons, this war is definitely worth fighting.

However, if Russia cannot withstand the later counter-sanctions, all these gains will be lost. Whether Russia can ultimately succeed in countering sanctions depends crucially on China.

Russia’s top leaders have understood that Russia’s hope for revival in the next 20 years lies in abandoning unrealistic fantasies, showing true sincerity to China, truly integrating economically with China, and quietly becoming China’s Canada. For Russia now, the best strategy is to set aside its pride, hide behind China, diligently cultivate its internal strength, and adapt to changes.

Becoming a world hegemon like the Soviet Union is no longer feasible, but becoming a regional power is still possible. In other words, a life of prosperity is still attainable.

The second major winner is China. China’s gains include:

1. A market for industrial products with over 200 million people (Russia + Central Asia).
2. Internationalization of the Renminbi as the world’s top boost, forming an overseas Renminbi fund pool of over $200 billion.
3. An energy and food supply base not threatened by the global naval power of the United States.
4. A reliable enforcer in Eastern Europe and the Middle East, reducing at least half of our military pressure in East Asia.
5. Others.

Most importantly, these are all mutually beneficial and equivalent exchanges between the two sides.

-–//—

On the current Blue Planet, there is essentially a hidden world government ruling the entire world, and that government is the Federal Reserve, and this world is called the capitalist world.

The Federal Reserve represents the international monopoly financial capital group using the United States as its facade. Its rule over the world relies on four hegemonies: technological hegemony, military hegemony, financial hegemony (dollar hegemony), and cultural hegemony, with military and dollar hegemonies being the most important.

The cornerstone of dollar hegemony is the petrodollar. Its principle is that over 80% of world trade requires shipping, and the United States, through cooperation with Middle Eastern oil-producing countries, led by Saudi Arabia, demands that their oil exports (the most important commodity in the world today) be settled in dollars. For those who do not comply, the United States uses its overwhelming naval and air power to blockade and sanction the world, thereby controlling global trade and, by extension, the lifeline of the world’s economies.

Then, the Federal Reserve, representing the international monopoly financial capital group, vampires the entire world by directly issuing U.S. Treasury bonds through the U.S. government. The total amount of U.S. Treasury bonds has gone from the level of a few hundred billion in the 1970s to several tens of trillions today. This is the process by which the international monopoly financial capital group uses green paper printed almost at no cost to plunder the wealth of the world’s people. Every few decades, the total amount of U.S. Treasury bonds needs to increase by an order of magnitude, which is the international monopoly financial capital group’s raid on the wealth of the world’s people.

In the 1970s, the price of oil was just over a dollar a barrel. As the de facto world central bank, the total amount of U.S. Treasury bonds was only a few hundred billion, and the world economy was operating normally. The United States was still living a good life. In the 1990s to the present, with the price of oil at tens of dollars per barrel, the total amount of U.S. Treasury bonds needed to be in the tens of trillions. With its powerful military and leadership in technology, the United States successfully completed the transition of increasing the dollar denomination by one order of magnitude. The world economy continued to operate normally, and the United States continued to live a good life.

Now, as long as the price of oil stabilizes and rises to around $150-200 per barrel within the next year or two, and the U.S. military can still ensure that the dollar remains the main payment currency for world oil, the United States will have no problems and will continue to enjoy good times.

However, now, there is China as a bug. The U.S. military hegemony already has a formidable opponent. From the current situation, given its 300-year accumulation of thick strength and the war dividends of two world wars and the Cold War, the United States can probably hold on for five to ten years without major problems. After ten years, it’s hard to say.

Now, let’s talk about the main competitor to dollar hegemony, the Renminbi.

Some people always say that the Renminbi is not freely convertible, so it has flaws, and it cannot expand its international reserve share. This is actually a classic rhetorical trap.

The so-called “freely convertible” means allowing one to take so-called freely convertible currencies like the dollar (as well as subordinate currencies like the euro, pound, yen, etc., under the current post-Bretton Woods international monetary system dominated by the dollar) to the central bank of a country and demand unconditional and unrestricted exchange of that country’s currency or demand to exchange that country’s currency for dollars, especially under the capital account.

So the question is:

Can any country announce that its currency has the right to “freely convert” and then go to the Federal Reserve and demand unconditional and unrestricted exchange for dollars, and will the United States exchange it for you? The answer is obviously no.

Therefore, the so-called “currency freely convertible” at present is nothing but the one-way free exchange right of the dollar. The current internationalization of the currency is pseudo-internationalization under the dollar control system. This kind of internationalization is better avoided.

The true internationalization and free convertibility of the Renminbi must take a new path and can definitely take a new path.

Currently, there are three feasible paths for Renminbi internationalization:

The first path is the internationalization under the dollar system advocated by many public intellectuals. Specifically, it means that the People’s Bank of China unilaterally relaxes and guarantees the capital account of the dollar’s free convertibility, just like Argentina, Russia, India, Hong Kong, South Korea, Japan, and Thailand before the Southeast Asian crisis, etc. In essence, it is to treat the Renminbi as a subordinate secondary currency

Here is the translation of the provided paragraphs into English:

---

Reposting it again.

The complementarity between China and Russia is incredibly strong. If both countries could genuinely unite, there would be no issue with U.S. hegemony.

The first major winner of the Russia-Ukraine war is Russia, although it has paid an extremely heavy price.

Seizing the strategic opportunity and taking the initiative, Russia has virtually dismembered Ukraine, occupying 20% of its most valuable territory and more than half of its coastline, gaining nearly ten million ethnic Russians. If they hadn’t acted, the consequence would have been an enemy state with forty million people a few hundred kilometers away from Moscow.

With one step in and one step out, how much has Russia gained?

The likely outcome of this Russia-Ukraine war is that Russia will take control of most of the four eastern Ukrainian provinces and Crimea. The situation on the battlefield will continue to stalemate, and economically, Russia will endure long-term Western sanctions and blockades.

In any case, taking control of these eastern Ukrainian provinces retains hope for the revival of the East Slavic people in a cruel world. Considering the pros and cons, this war is definitely worth fighting.

However, if Russia cannot withstand the later counter-sanctions, all these gains will be lost. Whether Russia can ultimately succeed in countering sanctions depends crucially on China.

Russia’s top leaders have understood that Russia’s hope for revival in the next 20 years lies in abandoning unrealistic fantasies, showing true sincerity to China, truly integrating economically with China, and quietly becoming China’s Canada. For Russia now, the best strategy is to set aside its pride, hide behind China, diligently cultivate its internal strength, and adapt to changes.

Becoming a world hegemon like the Soviet Union is no longer feasible, but becoming a regional power is still possible. In other words, a life of prosperity is still attainable.

The second major winner is China. China’s gains include:

1. A market for industrial products with over 200 million people (Russia + Central Asia).
2. Internationalization of the Renminbi as the world’s top boost, forming an overseas Renminbi fund pool of over $200 billion.
3. An energy and food supply base not threatened by the global naval power of the United States.
4. A reliable enforcer in Eastern Europe and the Middle East, reducing at least half of our military pressure in East Asia.
5. Others.

Most importantly, these are all mutually beneficial and equivalent exchanges between the two sides.

---

On the current Blue Planet, there is essentially a hidden world government ruling the entire world, and that government is the Federal Reserve, and this world is called the capitalist world.

The Federal Reserve represents the international monopoly financial capital group using the United States as its facade. Its rule over the world relies on four hegemonies: technological hegemony, military hegemony, financial hegemony (dollar hegemony), and cultural hegemony, with military and dollar hegemonies being the most important.

The cornerstone of dollar hegemony is the petrodollar. Its principle is that over 80% of world trade requires shipping, and the United States, through cooperation with Middle Eastern oil-producing countries, led by Saudi Arabia, demands that their oil exports (the most important commodity in the world today) be settled in dollars. For those who do not comply, the United States uses its overwhelming naval and air power to blockade and sanction the world, thereby controlling global trade and, by extension, the lifeline of the world’s economies.

Then, the Federal Reserve, representing the international monopoly financial capital group, vampires the entire world by directly issuing U.S. Treasury bonds through the U.S. government. The total amount of U.S. Treasury bonds has gone from the level of a few hundred billion in the 1970s to several tens of trillions today. This is the process by which the international monopoly financial capital group uses green paper printed almost at no cost to plunder the wealth of the world’s people. Every few decades, the total amount of U.S. Treasury bonds needs to increase by an order of magnitude, which is the international monopoly financial capital group’s raid on the wealth of the world’s people.

In the 1970s, the price of oil was just over a dollar a barrel. As the de facto world central bank, the total amount of U.S. Treasury bonds was only a few hundred billion, and the world economy was operating normally. The United States was still living a good life. In the 1990s to the present, with the price of oil at tens of dollars per barrel, the total amount of U.S. Treasury bonds needed to be in the tens of trillions. With its powerful military and leadership in technology, the United States successfully completed the transition of increasing the dollar denomination by one order of magnitude. The world economy continued to operate normally, and the United States continued to live a good life.

Now, as long as the price of oil stabilizes and rises to around $150-200 per barrel within the next year or two, and the U.S. military can still ensure that the dollar remains the main payment currency for world oil, the United States will have no problems and will continue to enjoy good times.

However, now, there is China as a bug. The U.S. military hegemony already has a formidable opponent. From the current situation, given its 300-year accumulation of thick strength and the war dividends of two world wars and the Cold War, the United States can probably hold on for five to ten years without major problems. After ten years, it’s hard to say.

Now, let’s talk about the main competitor to dollar hegemony, the Renminbi.

Some people always say that the Renminbi is not freely convertible, so it has flaws, and it cannot expand its international reserve share. This is actually a classic rhetorical trap.

The so-called “freely convertible” means allowing one to take so-called freely convertible currencies like the dollar (as well as subordinate currencies like the euro, pound, yen, etc., under the current post-Bretton Woods international monetary system dominated by the dollar) to the central bank of a country and demand unconditional and unrestricted exchange of that country’s currency or demand to exchange that country’s currency for dollars, especially under the capital account.

So the question is:

Can any country announce that its currency has the right to “freely convert” and then go to the Federal Reserve and demand unconditional and unrestricted exchange for dollars, and will the United States exchange it for you? The answer is obviously no.

Therefore, the so-called “currency freely convertible” at present is nothing but the one-way free exchange right of the dollar. The current internationalization of the currency is pseudo-internationalization under the dollar control system. This kind of internationalization is better avoided.

The true internationalization and free convertibility of the Renminbi must take a new path and can definitely take a new path.

Currently, there are three feasible paths for Renminbi internationalization:

The first path is the internationalization under the dollar system advocated by many public intellectuals. Specifically, it means that the People’s Bank of China unilaterally relaxes and guarantees the capital account of the dollar’s free convertibility, just like Argentina, Russia, India, Hong Kong, South Korea, Japan, and Thailand before the Southeast Asian crisis, etc. In essence, it is to treat the Renminbi as a subordinate secondary currency

This moment, all the “Yellow Russians” have turned into “Black Friends.”

This is pursuing small gains while forgetting the greater good.

What about your principles? What about your conscience?

In the future, all countries can learn from Russia’s advanced experience.

The United States' financial sanctions have been declared bankrupt, meaning that the United States has only one tool left.

American culture has gone bankrupt, with American-style democracy, American LGBT, and more becoming international laughingstocks, including Hollywood blockbusters consistently losing money…

Cultural tools are no longer effective, and financial tools are also useless. Next, the only tool left for the United States is military.

The U.S. military is still very powerful, with advanced weapons, but its soldiers are somewhat cowardly. Although they commit all kinds of misdeeds, they are very afraid of death and only bully weaker countries with bare hands. When faced with a more determined force like the Taliban, they are exposed—they couldn’t even defeat the Afghan army. Just look at the videos of Iranian forces making U.S. warships obedient.

Not to mention the Russian military, the U.S. military can’t win against them, let alone a certain major Eastern country.

So, the United States is destined to lose in this grand strategy.

For the United States, many smart people probably see it clearly now. They may be focusing on how to retain the position of the world’s second power.

To become the world’s second power, the United States must control Europe and India, preventing the “British Commonwealth” from forming. Currently, what the United States is doing is effectively encircling Europe with the support of the United Kingdom, Poland, Israel, and others, thus gaining control over Europe’s maritime and energy routes, thereby controlling Europe’s lifelines.

I still believe that American strategists are quite intelligent, and the ruling class in the United States is driven by self-interest and fear of death. They are not afraid of weaker entities but are most afraid of “king-capturing” nations, such as Russia.

As long as we continue on our current path, remaining undefeated, the United States will have no solution and will have to execute its world’s second strategy.

Going de-dollarized does not mean completely abandoning the US dollar. A more accurate term is “de-dollarization,” which means that in international trade, currencies other than the US dollar can also be used for buying and selling.

This way, firstly, the power of the US dollar as a sanction weapon diminishes, and its deterrent effect decreases as well. Secondly, the efficiency of the US dollar tidal wave in harvesting is also reduced.

This is beneficial for all countries in the world outside of the United States. Russia has set an example.

Furthermore, this also presents a very urgent problem for the United States and the European Union, with officials like Ursula von der Leyen lodging many complaints with China. The problem is that a large number of Chinese private enterprises, which are “newly established, have no business with Europe and the United States, or even specialize only in doing business with Russia,” have opened up business with Russia. The United States cannot monitor these transactions effectively, and there is no way to impose effective sanctions on these private enterprises. They can only watch as a large number of Chinese civilian products enter Russia, with some of them becoming crucial components for products like drones.

Russia finally understands that it has only China to rely on.

In the face of pressure from the G7 and NATO, the only entity that can save Russia, and the one that wants to save it, is China.

The G7 and NATO won’t spare Russia until they have broken it down into the size of countries like Ukraine and Lithuania.

Russia, even if it survives the Russia-Ukraine war, will not (dare to) let go of China’s support.

If it dares to fall out with China, the next crisis will be its death knell.

The reason is that the complementary industrial structure makes RMB settlement possible. Russia has resources and semi-finished products, while China has manufacturing capabilities. The strong economic complementarity between the two countries, combined with a basic balance in trade, makes RMB settlement a natural choice given the current international situation.

Other countries or regions with industrial structures similar to Russia can also learn from this model. One example is the oil-exporting countries in the Middle East, which lack manufacturing industries. However, it is crucial for China to improve the quality and reputation of its manufacturing products. Russia’s choice of Chinese products is a result of objective circumstances and limited alternatives, but other resource-rich countries have options.

A contrasting example is Australia. Australia also has a strong industrial complementarity with China, with its foundation being the mining industry. Most of its iron ore, lithium, and copper have been purchased by China. However, Australia has been reluctant to embrace Chinese manufacturing products, partly due to political factors.

Similarly, two major countries in South America, Brazil and Argentina, are both known for their mining, agriculture, and livestock industries. They produce resources that China needs, from iron ore in the Amazon to beef in the Pampas, and lithium in the South American salt flats. Both countries would theoretically benefit from Chinese products, and they also have complementary aspects, especially in the realm of soccer. However, the key remains the same: China’s manufacturing quality and brand recognition must improve.

Southeast Asia can serve as a partner in receiving a portion of China’s industrial relocation. However, Europe, the United States, Japan, and South Korea are not viable options. They are China’s direct competitors and the primary consumer markets for Chinese products.

China’s foundation lies in manufacturing, and foreign trade is its largest driver of economic growth. The internationalization of the RMB must be based on the expansion and strengthening of its manufacturing industry and its overseas exports.

We should not fully cooperate with Russia’s trade demands; instead, we should set up certain barriers.

At this moment, profiting is not the top priority; the crucial focus should be on their market. We need to penetrate their market and control their lifelines.

The Russo-Ukrainian war will continue for some time, but it cannot be sustained indefinitely. Similar to the Korean War, there are different phases: the preparatory phase, initiation phase, climax phase, sustained phase, and concluding phase, with multiple iterations in between. It has now entered the sustained phase, with another year or two until its conclusion.

Negotiations between Russia and Ukraine will last for several years, with occasional small-scale conflicts erupting. The overall direction will not change, and as long as interests reach a relatively balanced state, the war will end.

The confrontation between Western powers and Russia will persist for a longer duration. The UK is actively involved in the Russo-Ukrainian conflict, doing everything except directly sending troops.

At this point, our stance must be cautious. We should not make Russia feel we are not friendly enough, nor should we make Europe believe we are aiding their enemies in a comprehensive manner.

Transshipment trade is imperative. There are many former Soviet republics with trade channels to Russia, and we should increase our trade with Ukraine.

Interdependence like this is unbreakable, and no one can disrupt it.

Even though domestic exports may be eager, we should gradually reduce trade with Russia each year until it reaches seventy to eighty percent of the current level.

This way, Russia will yield more benefits, and the West will see us as a friend. Isn’t it better to have good relations on both sides?

Focusing only on personal gain without considering the harm, whether at the national or individual level, is not a good thing and should be avoided to the best of our abilities.

Unfortunately, Ukraine can only support us for one or two more years; otherwise, we might have obtained more favorable conditions.

It is unfortunate that Ukraine can only support us for one or two more years; otherwise, we might have obtained more favorable conditions.

The Explanation of the Ongoing Bleeding Bear is the Most Favorable State for Us

The sanctions imposed by Europe and the United States on Russia are beneficial in two ways: they promote the internationalization of the Renminbi (RMB) and accelerate trade cooperation between the two countries.

The latest foreign trade data clearly shows that our exports to Russia have seen substantial growth.

Western sanctions on Russia, along with calls to avoid doing business with Russia, effectively hand over a market of 100 million people to China.

This is undoubtedly a good thing, and the only thing other countries may learn from is the internationalization of the Renminbi.

Using our currency more frequently for settlements can prevent being at the mercy of the tidal waves of the US dollar.

However, taking over such a large market requires favorable conditions that are not easily replicated.

Not long ago, Russia stated that the settlement rate of Sino-Russian trade has reached 95%,

which means it is approaching 100%.

In April, Russia announced that over 70% of its trade settlements were conducted using the national currencies of both countries.

Just two years ago, this figure was only 30%.

This speed of transition is exceptionally rapid.

Russia is becoming increasingly reliant on our currency for settlements and is also dependent on our trade.

While many products have faced reduced sales in Europe and the United States due to restrictions, they have found a new market in Russia.

Europe and the United States impose sanctions on Russia, refusing to sell certain products to them. In response, Russia boycotts their products and buys ours.

Moreover, Russia is making concessions step by step, opening up ports, including those in the Far East. In the future, it may open up central and western interests as well.

All of this indicates that if Russia continues to be subjected to sanctions, and if the conflict between Russia and Ukraine continues, it will definitely be beneficial for China.

In 2019, China and Russia planned to increase bilateral trade to $200 billion by 2024.

From January to November of this year, Sino-Russian trade has already exceeded $218 billion, surpassing the target.

In the first quarter, the fastest-growing Chinese exports to Russia were cars, with a growth rate of 310%, followed by machinery and electronics, which grew by 90.3%.

Chinese-branded cars now account for nearly 40% of sales in Russia, and various consumer electronics products are gradually gaining a foothold in the Russian market.

It seems that Western sanctions on Russia have not had a significant impact on the Russian economy.

Instead, Europe is facing an energy crisis and rampant inflation.

Many of Europe’s traditional manufacturing powerhouses are gradually losing their cost advantages.

The United States, on the other hand, has blown up the Nord Stream pipeline, exacerbating Europe’s energy crisis. Europe feels the impact more significantly in recent years.

Now that Russia is isolated by Europe and the United States, relying on China is the only option.

If sanctions continue for a few more years, Europe may be mostly harvested by the United States. Their high-end manufacturing is gradually losing competitiveness, which is also a great thing for us.

In the end, it is unclear who will be the most unfortunate and who will benefit the most after the conflict between Russia and Ukraine.

But for now, Europe seems to be the biggest loser.

China and Russia, joining forces, have already torn a huge gap in the carefully crafted SWIFT system by the United States, and have declared to the world that trade without the U.S. dollar not only faces no obstacles but can also thrive. Its enormous demonstration effect will fully manifest in the future.

At the same time,

According to data released by the General Administration of Customs of China on the 7th, from January to November 2023, Sino-Russian trade increased by 26.7%, reaching a record high of $218.18 billion. The goal of $200 billion was achieved a year ahead of schedule.

What does $218.18 billion mean? To put it in perspective, in 2022, our bilateral trade with India, a country with a population of 1.4 billion, was only $135.984 billion, while our bilateral trade with the “major European powers” - the UK and France - was $103.3 billion and 101.8 billion euros, respectively. With a trade volume exceeding $200 billion, it can enter the top tier of bilateral relationships globally.

It is the arrogant sanctions imposed by the United States that have prompted the world’s largest resource country and the world’s largest manufacturing center to complement each other forcefully, forming a formidable alliance. This is probably why China can remain calm under extreme pressure from the United States, and Russia can confront NATO tenaciously until their military arsenals are depleted.

With strong support from our country, Russia has re-entered the ranks of the world’s top ten economies.

Friends of Ukraine should also label our country as “Yellow Russia.” You’ve already moved into Russia’s “nest,” so why haven’t you prospered yet? It’s not because the American side doesn’t want you, is it?

Ukraine is in trouble now. Overnight, the so-called “Yellow Russia” has all turned into “Ukraine’s friends.” Haha.

A Guangdong province with a GDP equivalent to Guo Jia’s is still shrinking. How many factories can it really support us?

In order to sustain a protracted war, recover and maintain national strength, and ensure domestic economic stability following the Russia-Ukraine conflict, Russia has been compelled to engage in trade with China. The duration and extent of this trade will primarily depend on the situation on the Russia-Ukraine battlefield.

The more dire the battlefield situation becomes for Russia, the more prosperous Sino-Russian trade develops.

Russia is the world’s largest resource-rich nation.

Russia boasts significant coal, oil, natural gas, and other mineral resources, as well as abundant industrial products like electrolytic aluminum and fertilizers. It also maintains substantial grain reserves.

China is the world’s factory, with a complete industrial chain and a well-developed manufacturing sector.

China and Russia are highly complementary economically, sharing a border that should have fostered explosive bilateral trade. However, due to various reasons, the two nations have long had conflicting interests, with political heat but economic coldness. In the past, China often had to seek favor with Russia, while Russia harbored deep mistrust and guarded itself against China. At one point, Russia even contemplated using us as leverage against the West.

Yet, Western countries, led by the United States, have always feared Russia’s enormous potential as a great power. Russia has consistently been viewed as their top adversary.

Western reluctance to embrace Russia has two main reasons: firstly, Russia’s size is too immense, and integrating it into Europe would quickly make it a decisive force. Western nations naturally do not wish to see this scenario unfold. Secondly, Western powers believe that Russia’s deeply rooted Mongol cultural genes, cultivated during centuries of Mongol rule, coupled with its long-standing history of slavery, including the enduring institution of serfdom, make it a backward nation. Furthermore, Russia has a history of pillaging, earning it the derogatory label of the “half-savage” state in the West. Although Russia has always aspired to catch up with Western civilization and integrate into the Western circle, it has encountered numerous obstacles and has been largely unsuccessful in its efforts. The West has consistently excluded Russia due to various reasons. However, owing to geographical factors and others, Russia has gained a profound appreciation for Western civilization’s advancements, productive capacity, and constant military and technological innovation. Consequently, Russia, under the influence of capital, technology, and cultural ideas from the West, has managed to achieve astonishing growth throughout its history. This includes Peter the Great’s reforms in history, Russia’s rapid rise in the second half of the 19th century, and the Soviet Union, led by Stalin, which “rapidly completed industrialization” through three five-year plans, leaping to become Europe’s leading industrial power and the world’s second-largest industrial superpower.

This recurring pattern of explosive growth every few decades terrifies Western European countries.

Hence, among Western nations, there exists an unspoken consensus: whoever is the big brother of Western Europe must assume the innate mission of sealing Russia within the Arctic Circle.

The Crimean War in 1853, where the British and French coalition soundly defeated Russia, the Anglo-Japanese Alliance in 1905, where Britain supported Japan in attacking Russia, and the post-World War II era, with the United States leading NATO against the Warsaw Pact, are all concrete manifestations of this strategy.

After the dissolution of the Soviet Union in 1991, NATO continued to expand eastward, completely encircling Russia—a continuation of this strategy.

Now, the United States is the big brother and naturally bears the responsibility of blocking and restricting Russia.

Western European countries firmly believe that:

“A dead Russian is a good Russian, and a fragmented Russian is a good Russian.” They have been waiting for this opportunity to completely dismember Russia for three hundred years. This time, they will not easily give up this “divinely granted opportunity.” Moreover, Western European countries do not need to send troops; they only need to provide weapons, financial assistance, and some moral support for Ukraine, and Putin and Russia will continue to be worn down.

Before February 24, 2022, Western European countries did not dare to dream of such a fortunate event.

As of now, Russia has suffered two strategic defeats, significantly damaging its potential as a great power. The first was during World War II when the Soviet Red Army ultimately captured Berlin. However, more than two million young Russian men died in the war, resulting in a significant population decline in Russia. This was a gift from Nazi Germany.

The second was in 1991 when the Soviet Union collapsed, a gift from the entire Western world led by the United States.

The Russia-Ukraine conflict has seen Russia voluntarily fall into a strategic trap designed by Western countries, led by the United States. Russia, in order to break free from its current strategic predicament, has been forced to deploy its most potent weapon: a war of attrition.

Russia has accepted the reality that it cannot achieve a quick victory, nor can it attain an overall victory. Instead, it has chosen to settle for preserving its existing gains.

Therefore, Russia has begun a protracted war and a defensive battle against Ukraine.

To sustain a long-term war, recover and maintain national strength, and ensure domestic economic stability, Russia has been compelled to engage in trade with China following the Russia-Ukraine conflict. The duration and extent of this trade will primarily depend on the situation on the Russia-Ukraine battlefield.

The more dire the battlefield situation becomes for Russia, the more prosperous Sino-Russian trade develops.

It’s not a matter of borrowing or not borrowing; it’s that many intermediate actions in this matter are referenceable. The greatest significance, in my opinion, is to clarify four things:

1. Dollar settlement is merely a habit.
2. SWIFT can be bypassed.
3. Changing the currency settlement at this level can be achieved in 2 years.
4. Other countries' currencies may not be so unreliable.

So, the perspective should shift away from China and Russia. If China and Russia can achieve almost entirely local currency trade, can’t India and Turkey achieve 20% local currency trade? Can’t Europe and Japan achieve 20% local currency trade? You can’t say that such a thing is only feasible for China and Russia because China is the chosen people of the dragon, and Russia is the descendant of the thunder god.

As for the United States' off-board tactics, such as providing military security, you can see from Ukraine and Israel that with just this empowerment, and the purpose of the dollar tide is openly and blatantly achieved, this account will be calculated. For example, Europe relies on the dollar not because it is afraid of North America, and it is even less about repaying Marshall’s favor. It’s just that this system has inertia, and it’s profitable. But when the returns are not as substantial and the risks begin to emerge, Europe will have other ideas, such as the previous attempt to reconcile with Russia. Of course, now, due to reasons related to Russia and Israel or indeed U.S. involvement, Eastern Europe and the Middle East are exploding. But you can’t make the whole world explode and be the only one left to benefit; you don’t have that capability. So, the remaining healthy economies will always try to “collude” with each other.

Therefore, the referential value of this matter is very strong.

It indicates that large-scale, or even purely dollar settlements, are just habits that can be quickly (within 2 years) reversed, and other currencies, as long as carefully considered, are not so undesirable.

Based on the principle of not putting all currencies in one basket, this should be a very good signal for promoting multilateral trade.

I genuinely hope that the conflict between Israel and Palestine ends as soon as possible, and that the United States redirects its resources and efforts back to Ukraine sooner.

Ukraine, being such a large country, can easily mobilize another million troops; it’s just a matter of waiting for NATO’s weapons and funding.

Supporting Ukraine’s just war!