Thus far, the most severe consequence of Russia’s military operation has been the exclusion of Russian banks from the global financial system. But the tide seems to be turning with petrodollar’s status threatened as first shipment of Russian coal paid in Yuan is on its way to China.
- EXPLOSIVE: Here’s what was uncovered in Hunter Biden’s iCloud Hack
- MAJOR PEER REVIEWED STUDY: Moderna Vaccine Increases Myocarditis Risk By 44 Times In Young Adults
- MUST READ: High Level International Bankers Simulate The Collapse Of Global Financial System
- BIG STORY: Wuhan Lab Isolated Monkeypox Strain In 2020
- EXPLOSIVE: Ukraine Biolabs Used Fever Carrying Mosquitoes To Spark Dengue Pandemic In Cuba
The first shipments of Russian coal and crude oil will start arriving in China in April and May, respectively, and will be paid for in yuan. The occasion was taken by Chinese official media to criticize the United States, alleging that the dollar’s international stature is “at risk.” Financial expert Albert Song, on the other hand, thinks it will have no impact on the dollar’s role as the world’s main reserve currency.
Several Chinese enterprises acquired Russian coal in Chinese currency in March, according to Fenwei Energy Information Service Co., China’s largest information and service supplier to the coal and coke industries. The first shipment is expected in April. It’s also the first cargo of Russian goods paid in yuan to arrive in China since Western countries sanctioned Russia, reports The Epoch Times.
Fenwei did not provide an estimated delivery date for the shipment.
Chinese buyers utilized the yuan to acquire Russian crude oil in addition to coal. According to a statement published in early April on Cngold.org, a Chinese internet media portal about investing, the very first ESPO (Eastern Siberia Pacific Ocean) crude oil will be supplied in May.
Subscribe to GreatGameIndia
According to the publication, transactions in US dollars would become less popular as a result of Fenwei’s acquisitions.
“Russia announced that it would only accept payments in rubles for Russian oil and natural gas, which turned the United States and European countries from those who impose sanctions to those who are subjected to sanctions,” the commentary said. “Chinese yuan seized the opportunity and began to reveal its potential in global trade payments. Now that coal and oil paid for in yuan will arrive in China, the international community [will] become green-eyed [at our success].”
The latest Chinese acquisitions of Russian commodities in yuan will not influence the international standing of the US dollar, according to Albert Song, a researcher at Tianjun, a politics and economics think tank, who told the media on April 23 that “these are only bilateral trades between China and Russia, not multilateral trades involving other countries.”
Song has 27 years of expertise in China’s financial industry, with an emphasis on China’s politics and economics studies.
According to data issued by China’s General Administration of Customs in mid-April, the volume of imported coal and lignite to China fell 39.9% year over year in March and 24.2 percent in the first quarter. Russian imports, on the other hand, not only held their top rank in China’s coking coal imports in March, but their volume more than doubled year over year.
The entire value of China’s imports from Russia is also increasing. According to the General Administration of Customs’ latest mid-April data, overall imports from Russia grew to $21.73 billion in the first quarter of 2022, up 31 percent year on year, second only to Indonesia’s 31.4 percent.
When praising the yuan’s expanding significance, the post on Cngold.org also disclosed that China’s regime is now in talks with Saudi Arabia, with the intention of using the renminbi to price crude oil in part.
Song disagrees with the implication of the analysis that the Chinese yuan is a rising star on the global stage.
“The most important thing is that a country’s sovereign currency is recognized by many countries. Although the Chinese Communist Party claims that the renminbi is on the path of internationalization, the share of renminbi’s international payments over the years has only been 3.2 percent because it is a government-controlled currency and cannot be freely exchanged. It is therefore a currency with poor credit to begin with,” Song commented.
China Wary of Sanctions
The European Union imposed the fifth set of sanctions on Russia on April 7, comprising a ban on Russian coal imports.
So far, the most severe consequence has been the exclusion of Russian banks from the global financial system. Following the suspension of Visa and Mastercard facilities in Russia, Russian banks have stated that they want to provide cards using China’s UnionPay infrastructure.
Unionpay cards are offered in over 70 countries and regions, making it China’s largest credit card brand.
However, the Russian media outlet RBC claimed on April 20 that China’s UnionPay has declined to collaborate with Russian banks for concern of becoming sanctioned, presenting Russia with fewer credit card choices for its international operations.
“China UnionPay chooses not to cooperate with Russian banks, for fear that itself will get implicated in the sanctions. The CCP needs the New York Clearing House interbank payments system to obtain dollars. Sanctions against China will block it from earning foreign exchanges through exports,” Song explained.
He went on to say that China’s economic growth is driven by three factors: foreign trade, investment, and consumption.
“All three are in decline. If additional sanctions are imposed on China, it will be an unbearable situation for China’s economy,” he said.