MOSCOW, November 10 (Sputnik), Daria Chernyshova — The attitude to the United States and energy issues are at the core of relations between Russia and China, experts told Sputnik Monday, commenting on the recent meeting between the Russian and Chinese leaders.
“The fact that Russia is such an important supplier of key commodities, and China is pretty poor on natural resources, means that the two countries have a kind of mutual interest and mutual dependence,” Martin Jacques, the author of the global bestseller “When China Rules the World” told RIA Novosti.
“Energy is obviously an important part of that and for China this is a reliable supplier next door. There is question that China is in need of more energy and especially clean energy,” Oded Shenkar, professor of international business at the Fisher College of Business said. “What the two countries have very much in common now is having very negative attitude toward the United States. They would like to see the US going down,” he added.
On Sunday, Russian President Vladimir Putin and Chinese President Xi Jinping met in Beijing. The sides discussed a number of bilateral issues and signed 17 documents, including the memorandum on the delivery of Russian natural gas to China via the so-called western route.
“This agreement further to the one previously where Russia was going to supply China with a great deal of gas, now it is going to be even more,” Martin Jacques said. “It is very important in the relationship between the two countries. It is going to be the major foundation stone of the economic relationship. It gives further evidence that as Russia’s relations with the West have become much more difficult, Russia was pivotal to China. I think it is clear that the relationship between the two countries is growing closer.”
“Russia needs a reliable customer for its energy supplies and China needs a reliable supplier,” Oded Shenkar pointed out.
Putin and Xi also discussed the possibility of using the yuan in mutual transactions in different fields of cooperation. According to the Russian president, possibilities to increase the use of the Russian and Chinese currencies in bilateral trade and notably in the energy sector are currently being studied.
“This is not a new development, this started at the end of 2008-2009, when the Chinese decided to make the renminbi an international currency, not a reserve currency,” Jacques reminded.
“Now over 20 percent of Chinese trade is paid for in renminbi. So, basically, the use of renminbi is largely replacing the use of the dollar,” he said, adding that given Russia’s important role as a supplier of oil products and gas, in a situation where trade is conducted either in the ruble or in the renminbi, the role of the dollar will diminish.
Shenkar stressed that “anything that helps with that such as replacing the dollar as the world reserve currency or at least having some substitute is certainly what both support.”
At the same time the renminbi is unlikely to become a reserve currency, Jacques noted.
“I think we are not in a situation where the renminbi is going to be a reserve currency,” he said adding that renminbi cannot be used as a reserve currency because it is not convertible,” he said. “Once it becomes a convertible currency, it will most certainly be the second most important currency in the world, and I would expect it to replace the dollar as a predominant reserve currency very quickly,” Jacques said.