What happened: China and Russia reduce the use of the dollar in bilateral trade transactions. It brings two countries to a “financial Alliance”, the report said as of August 6 published by Nikkei Asian Review. In the first quarter of 2020, only 46 percent of the bilateral transactions between the two countries was carried out in dollars. In 2015 about 90 per cent of transactions were conducted in dollars.
Why it matters: Russia and China as geopolitical enemies of the United States are interested in reducing the dominance of the dollar in world markets. However, the conduct bilateral trade in their national currencies or in currencies of third countries is a very small step in that direction given the fact that more than 93 per cent of world trade is currently carried out in dollars or euros. Reducing the use of the dollar in their transactions, Moscow and Beijing yet, most likely, will try to avoid secondary us sanctions.
Background: the bilateral trade turnover between China and Russia in 2019 amounted to around 109 billion dollars. Meanwhile, the total volume of world trade is around $ 19 trillion.