So far, Putin’s visit to China appears to have lead to a deal where Russia and China increase the volume of direct payments in mutual trade in their national currencies. In other words, they are beginning the long march towards a Eurasian century beginning with a step towards de-dollarization. According to a released statement:
“The sides intend to take new steps to increase the level and expansion of spheres of Russian-Chinese practical cooperation, in particular to establish close cooperation in the financial sphere, including an increase in direct payments in the Russian and Chinese national currencies in trade, investments and loan services.”
Specifically, VTB, Russia’s second biggest lender, has signed a deal with Bank of China, which includes an agreement to pay each other in domestic currencies. According to the statement:
VTB Bank and Bank of China today signed an Agreement on Cooperation in the presence of Russian President Vladimir Putin and Chinese President Xi Jinping.
The agreement was signed by First Deputy President and Chairman of VTB Bank Management Board Vasily Titov and Bank of China President Chen Siqing.
Under the agreement, the banks plan to develop their partnership in a number of areas, including cooperation on ruble and renminbi settlements, investment banking, inter-bank lending, trade finance and capital-markets transactions.
Vasily Titov said: “The signing of the agreement underscores VTB Group’s ongoing drive to grow its business in Asia, and will help facilitate the development of bilateral trade and economic relations between Russia and China, which have always been reliable partners.”
VTB Group is Russia’s second biggest financial institution with more than 30 banks and financial firms in more than 20 countries. Its assets were estimated at 8.8 billion rubles as of 2013, with a profit of 100.5 billion rubles.
In addition, Russia and China have also agreed to set up a Committee on Investment Cooperation that will enable consultations between the countries’ first vice premiers and representatives of state and private companies.
However and while environmentalists hold up the critical Keystone Pipeline in North America over petty ideological reasons, it looks like a gas pipeline deal may be stalled as the Chinese drive a hard bargain on gas prices. It should be mentioned that Pepe Escobar has written extensively about so-called “Pipelineistan,” all those crucial oil and gas pipelines crisscrossing Eurasia that increasingly make up circulatory system for the life of the region, and what it will mean, especially for America and the West, when a Russia-China pipeline deal is finally struck.
UPDATE: It appears a gas deal worth $400 billion has been agreed upon. See Russia and China seal historic $400bn gas deal on the website of RT.
You can read The birth of a Eurasian century: Russia and China do Pipelineistan and Russia’s VTB and Bank of China agree on domestic currency settlements on the website of RT along with Russia, China Plan to Expand Payments in National Currencies on the website of RIA Novosti.
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