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China and Russia Sign 12 Documents in Trade and Economic Unification Deal
11-25-2010, 03:08 AM,
#1
China and Russia Sign 12 Documents in Trade and Economic Unification Deal
Misleading title on this article but read on ..

Quote:China, Russia quit dollar
By Su Qiang and Li Xiaokun (China Daily)
Updated: 2010-11-24 08:02

[Image: 0023ae73cfef0e569b3f59.jpg]
Premier Wen Jiabao shakes hands with his Russian counterpart Vladimir Putin on a visit to St. Petersburg on Tuesday.ALEXEY DRUZHININ / AFP

St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

"About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.

The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said.

"That has forged an important step in bilateral trade and it is a result of the consolidated financial systems of world countries," he said.

Putin made his remarks after a meeting with Wen. They also officiated at a signing ceremony for 12 documents, including energy cooperation.

The documents covered cooperation on aviation, railroad construction, customs, protecting intellectual property, culture and a joint communiqu. Details of the documents have yet to be released.

Putin said one of the pacts between the two countries is about the purchase of two nuclear reactors from Russia by China's Tianwan nuclear power plant, the most advanced nuclear power complex in China.

Putin has called for boosting sales of natural resources - Russia's main export - to China, but price has proven to be a sticking point.

Russian Deputy Prime Minister Igor Sechin, who holds sway over Russia's energy sector, said following a meeting with Chinese representatives that Moscow and Beijing are unlikely to agree on the price of Russian gas supplies to China before the middle of next year.

Russia is looking for China to pay prices similar to those Russian gas giant Gazprom charges its European customers, but Beijing wants a discount. The two sides were about $100 per 1,000 cubic meters apart, according to Chinese officials last week.

Wen's trip follows Russian President Dmitry Medvedev's three-day visit to China in September, during which he and President Hu Jintao launched a cross-border pipeline linking the world's biggest energy producer with the largest energy consumer.

Wen said at the press conference that the partnership between Beijing and Moscow has "reached an unprecedented level" and pledged the two countries will "never become each other's enemy".

Over the past year, "our strategic cooperative partnership endured strenuous tests and reached an unprecedented level," Wen said, adding the two nations are now more confident and determined to defend their mutual interests.

"China will firmly follow the path of peaceful development and support the renaissance of Russia as a great power," he said.

"The modernization of China will not affect other countries' interests, while a solid and strong Sino-Russian relationship is in line with the fundamental interests of both countries."

Wen said Beijing is willing to boost cooperation with Moscow in Northeast Asia, Central Asia and the Asia-Pacific region, as well as in major international organizations and on mechanisms in pursuit of a "fair and reasonable new order" in international politics and the economy.

Sun Zhuangzhi, a senior researcher in Central Asian studies at the Chinese Academy of Social Sciences, said the new mode of trade settlement between China and Russia follows a global trend after the financial crisis exposed the faults of a dollar-dominated world financial system.

Pang Zhongying, who specializes in international politics at Renmin University of China, said the proposal is not challenging the dollar, but aimed at avoiding the risks the dollar represents.

Wen arrived in the northern Russian city on Monday evening for a regular meeting between Chinese and Russian heads of government.

He left St. Petersburg for Moscow late on Tuesday and is set to meet with Russian President Dmitry Medvedev on Wednesday.

Agencies and Zhou Wa contributed to this story.
http://digg.com/news/politics/china_russia_quit_dollar
http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm


Without denying entry of the foreign / US dollars into the economy this will have no effect, directly. But indirectly this policy could make for China and Russia to accept less US / Foreign dollars since they are not transferable between their economies. If that comes to pass it is an economic sanction on importing currency and not only the US but to the rest of the world since it is a closed circle of trade.

This is more than about the dollar though. It's a unification of a power bloc. Benefits would appear to favour China because of their cheap labour, but we have yet to see the fine print since the documents are not published yet.

"That has forged an important step in bilateral trade and it is a result of the consolidated financial systems of world countries" ~ Putin.

12 documents, including cooperation on energy, resources, aviation, railroad construction, customs, protecting intellectual property, culture and a joint communique were signed.

The IP deal looks to be another step in the ACTA agenda. I don't see anything that points to labour or environmental standards and those types of deals tend to gravitate to the lowest common denominator favouring select corporate interests and hurting labour unions. I'll save further comment for until I see the actual documents.
There are no others, there is only us.
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11-25-2010, 04:17 AM,
#2
RE: China and Russia Sign 12 Documents in Trade and Economic Unification Deal
This is a massive diplomatic offensive against the NATO nations in general, and a huge hit to the US in particular, following China's suspension of purchasing US debt. It also throws a huge wrench into the works of the bloody strategic positioning of the US in central asia. The fact that Russia is trading the Renminbi is a significant move that deserves some attention. As far as I'm aware, up until this point it has been China's internal currency, with the Yuan being used as the sole currency for trade with foreign countries. It makes me think that this is a major reason why the US brought CYBERCOM online at the end of last month, and a possible reason for North Korea to start blowing shit up ahead of disarmament talks. Something tells me that the US might think twice about conducting exercises off their coast in the near future. Rest assured, if we end up with a hawkish president in 2012, we'll have a new cold war brewing.
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