Source: Capital News Published: 2024-01-29

In recent years, the global trend of de-dollarization and expanding local currency settlements has become increasingly evident. China and Russia, as major global economies and important trading partners, have continuously made new progress in their local currency settlement cooperation.

Data shows that in the first 10 months of this year, the trade volume between China and Russia surpassed $196.4 billion, making it clear that surpassing the annual goal of $200 billion is a foregone conclusion. Russian Prime Minister Mishustin stated last month that over 90% of cross-border settlements between Russia and China are now conducted in local currencies.

While China and Russia steadily advance comprehensive and multi-layered cooperation, Western media has begun to adopt a two-faced approach, on the one hand, emphasizing the collaboration between China and Russia to resist the West, and on the other hand, claiming that Russia is becoming dependent on China, attempting to sow discord.

How should we view the denigration and provocation from the West? What developments has Russia achieved under the Belt and Road Initiative(BRI) framework? How is the integration progress between the Eurasian Economic Union and the 'Belt and Road' initiative? What aspects will be the focus in the next steps? How is Russia vigorously promoting 'de-dollarization,' and what actions has it taken?

In collaboration with RDCY, Capital News has launched the 'Global Governance Forum' section. Sergey Glaziev, a Russian politician and economist, member of the National Financial Council of the Bank of Russia, and the Commissioner for Integration and Macroeconomics within the Eurasian Economic Commission, the executive body of the Eurasian Economic Union, shared his views on the Belt and Road Initiative, China-Russian ties and other issues with us.

Sergey Glaziev stressed that in order to avoid the further acceleration of American aggression and to create new opportunities in economic growth, Russia needs more safe financial infrastructure. It couldn't use American dollar anymore, as well as European Euro, British Pound, or German Mark. For Russia, they all are toxic currencies, which are used by the Western countries, as an instrument of political pressure, and even as a weapon against independent nations. Notably, more than half of the trade between Russia and China is international currencies, and almost half of the export is already paid by Russian ruble. Russia and China are moving international currencies, and we are speaking about the introduction of the new essential currency, which will be based on the international treaty.

Glazyev had warned for years that it was imperative for Moscow to sell out foreign exchange assets placed in the US, Britain, France, Germany, and others which later ended up unleashing sanctions against Russia.

These assets should have been replaced by investments in gold and other precious metals; stocks of highly liquid commodity values; in securities of the EAEU, SCO, and BRICS member states; and in the capital of international organizations with Russian participation, such as the Eurasian Development Bank, the CIS Interstate Bank, and the BRICS Development Bank.

In a this interview, Sergey Glaziev also emphasized the inevitability of a global trade currency in the current economic context.

Glaziev defined the existing monetary system as 'irrational' and advocated a substantial overhaul of the international financial framework. He pointed to the declining importance of the US dollar as a factor in this.

The declining prevalence of greenbacks in the global economy has highlighted the need for an alternative unit of account for global transactions. Therefore, the idea of a single currency may turn out to be more plausible than previously thought.

In light of the growth and importance of BRICS has emerged discussions on a single currency, exploring different approaches such as digital assets or pegging it to gold.

Glaziev argues that a BRICS trade currency may indeed be inevitable, he stresses that the countries that determine global economic development want to fundamentally reform the international financial system.

Glaziev also emphasized that dependence on the US dollar is decreasing, especially within the Eurasian Economic Union, where national currencies mostly replace it.

In conclusion, Glaziev confirmed that the BRICS bloc has a viable model for such a currency, based not only on selected national currencies of the member countries, but also on a basket of traded goods.

As for the Belt and Road Initiative, Over these 10 years, we have stayed committed to this founding mission. Thanks to our joint efforts, Belt and Road international cooperation has gotten off the ground, grown rapidly and produced fruitful outcomes.

Belt and Road cooperation has extended from the Eurasian continent to Africa and Latin America. More than 150 countries and over 30 international organizations have signed Belt and Road cooperation documents. We have held two sessions of the BRF before, and have established over 20 specialized multilateral cooperation platforms under the BRI.

Belt and Road cooperation has progressed from 'sketching the outline' to 'filling in the details,' and blueprints have been turned into real projects. A large number of signature projects and 'small yet smart' people-centered programs have been launched.

Belt and Road cooperation has expanded from physical connectivity to institutional connectivity. Important guiding principles for high-quality Belt and Road cooperation have been laid down, which include the principle of 'planning together, building together, and benefiting together,' the philosophy of open, green and clean cooperation, and the goal of pursuing high-standard, people-centered and sustainable cooperation.

Over these 10 years, we have endeavored to build a global network of connectivity consisting of economic corridors, international transportation routes and information highway as well as railways, roads, airports, ports, pipelines and power grids. Covering the land, the ocean, the sky and the Internet, this network has boosted the flow of goods, capital, technologies and human resources among countries involved and injected fresh vitality into the millennia-old Silk Road in the new era.

Trains speeding along rail tracks, automobiles running on roads, flights connecting different countries, cargo ships breaking waves, and e-commerce bringing so much convenience to people -- they have all become symbols of international trade in the new era, just like camel caravans and the sailing ships were for the past age.

Hydro, wind and solar energy based power plants, oil and gas pipelines, and the increasingly smart and interconnected power transmission networks are removing the development bottleneck caused by energy shortage and fulfilling the dream of developing countries to achieve green and low-carbon development. These energy projects have become the oasis and lighthouse for sustainable development in the new era.

Brand new airports and harbors, smooth roads, and newly built industrial parks for business cooperation have created new economic corridors and new growth drivers, and have become the trading routes and staging posts of the new era.

Rich and colorful cultural years, art festivals, expos and exhibitions, Luban Workshops, people-to-people exchange programs like the Silk Road Community Building Initiative and the Brightness Action program, and deepening exchanges between non-governmental organizations, think tanks, media organizations, and the youth -- all these flourishing activities have composed a symphony of friendship in the new era.

When COVID-19 struck, the Belt and Road became a life-saving road. China provided more than 10 billion masks and 2.3 billion doses of vaccines to other countries and jointly produced vaccines with over 20 countries, making a special contribution to BRI partners' efforts in fighting COVID-19. And China also received valuable support from more than 70 countries when it was hit hard by the pandemic.

Belt and Road cooperation is based on the principle of 'planning together, building together, and benefiting together.' It transcends differences between civilizations, cultures, social systems, and stages of development. It has opened up a new path for exchanges among countries, and established a new framework for international cooperation. Indeed, the BRI represents humanity's joint pursuit of development for all.

Glaziev stressed that The Belt and Road initiative (BRI) stands out as the largest integration project in the world. During the progression of this project, the volume of trade between countries which are involved in this project has increased from $1 trillion to $2 trillion, marking a substantial increase. The investments facilitated by this initiative have experienced a remarkable upswing, surpassing the combined investments of the Asian and European development banks. Undoubtedly, this is the largest integration project in the world. I think that it is a good example for all the other countries, how the international economic relations should be organized in the post-liberal globalization era.

At the core of international economic relations during the liberal globalization phase was the emphasis on liberalizing foreign trade and current regulations. The idea of the liberal globalization was to give opportunity for international capital to flow free from one country to another. This ideology was used for the oligarchs, financial structures in the United States and Europe. So, the free trade and liberalization of currency regulations was in favor of American and European capital. And it was, to some extent, the zero-sum game, the American and European capital got into the countries and control the major source of revenues in those countries, and then take a huge profit away. Such kind of integration which happened in the European Union, shows that for a lot of countries, it was a disaster. The era of liberal globalization is now drawing to a close.

In the emerging international economic landscape, the focal point shifts from the liberalization of foreign trade to the idea of mutual investments. The Chinese initiatives—Belt and Road Initiative— exemplifies this shift, demonstrating how international economic cooperation can thrive based on mutual investments rather than rigid trade and currency regulations. We are not caring what kind of currency regulation is in this or that country. We are not care what is the trade regimes in this or other countries. This is the internal issue of the southern nations. The idea of Belt and Road initiative is to combine the competitive advantages in different countries to boost the production of goods and services, for the well-being of the population. The Belt and Road initiative is an example of the future mainstream of economic and international cooperation between countries. And we follow this route, we can combine our competitive advantages in the mutual investment projects in order to improve compatibility of our economies.

Moreover, we also noticed that the United States and some Western countries keep criticizing the comprehensive strategic partnership between China and Russia, stigmatizing their normal diplomatic dialogues and even exerting continuous pressure, urging the two countries to keep their distance.

Glaziev argues that Russia and China should not care about the opinion of the unfriendly countries regarding our comprehensive strategic partnership. Being the two sovereign powers, Russia and China can build their relations according to their own interests. Notably, The leaders of our countries have regular meetings, the highest level of trust and mutual understanding.

He suggested that Russia and China need to work seriously on the real content of our strategic comprehensive strategic partnership. First of all, we need large-scale joint investment projects in high-tech industries, for example, such as the creation of a wide-body long-haul passenger aircraft, the construction of nuclear power plant, etc. It is necessary to stimulate the development of joint productions, the expansion of “cooperative cooperation”. To do this, we need to work out the mechanisms of targeted lending for such projects. We should develop close cooperation between our development institutions and large banks.

He stressed that it is crucial to expand cooperation in the sphere of education and science. To do this, it is advisable to develop network forms of interaction between universities, the double diploma practice and academic mobility. Consortia and technological alliances are promising forms of cooperation.

Moreover, it is necessary to increase joint investments abroad in third countries. This activity strengthens trust and creates a synergy of Russia-China competitive advantages’ combining. A joint initiative of our countries to introduce a new international digital currency, tied to a basket of exchange-traded goods, would be very relevant and certainly be supported by other BRICS and SCO countries. Its introduction could make it possible to get rid of dependence on unfriendly countries – not only in the field of payments and settlements, but also in pricing – and facilitate the transition to a new world economic mode.

EAEU Successfully Aligns with the BRI

Capital News: In 2023, it will mark the 10th anniversary of the introduction of the 'Belt and Road Initiative. The BRI, drawing inspiration from the ancient Silk Road and focusing on enhancing connectivity, aims to enhance policy, infrastructure, trade, financial and people-to-people connectivity, inject new impetus into the global economy, create new opportunities for global development, and build a new platform for international economic cooperation. As of June this year, China has signed over 200 cooperation agreements on jointly building the BRI with 152 countries and 32 international organizations. What’s your overall impression of the BRI?

Sergey Glaziev: The Belt and Road initiative (BRI) stands out as the largest integration project in the world. During the progression of this project, the volume of trade between countries which are involved in this project has increased from $1 trillion to $2 trillion, marking a substantial increase. The investments facilitated by this initiative have experienced a remarkable upswing, surpassing the combined investments of the Asian and European development banks. Undoubtedly, this is the largest integration project in the world. I think that it is a good example for all the other countries, how the international economic relations should be organized in the post-liberal globalization era.

At the core of international economic relations during the liberal globalization phase was the emphasis on liberalizing foreign trade and current regulations. The idea of the liberal globalization was to give opportunity for international capital to flow free from one country to another. This ideology was used for the oligarchs, financial structures in the United States and Europe. So, the free trade and liberalization of currency regulations was in favor of American and European capital. And it was, to some extent, the zero-sum game, the American and European capital got into the countries and control the major source of revenues in those countries, and then take a huge profit away. Such kind of integration which happened in the European Union, shows that for a lot of countries, it was a disaster. The era of liberal globalization is now drawing to a close.

In the emerging international economic landscape, the focal point shifts from the liberalization of foreign trade to the idea of mutual investments. The Chinese initiatives—Belt and Road Initiative— exemplifies this shift, demonstrating how international economic cooperation can thrive based on mutual investments rather than rigid trade and currency regulations. We are not caring what kind of currency regulation is in this or that country. We are not care what is the trade regimes in this or other countries. This is the internal issue of the southern nations. The idea of Belt and Road initiative is to combine the competitive advantages in different countries to boost the production of goods and services, for the well-being of the population. The Belt and Road initiative is an example of the future mainstream of economic and international cooperation between countries. And we follow this route, we can combine our competitive advantages in the mutual investment projects in order to improve compatibility of our economies.

Capital News: Russia is an important partner for China in the construction of the BRI. Russia President Vladimir Putin said that he sees China's Belt and Road Initiative (BRI) as a desire to cooperate on the global arena. He said that “we see that some perceive it as an attempt by the People's Republic of China to crush someone under itself, but we don't see this that way: we just see a desire for cooperation,' Russia's RIA state news agency cited Putin as saying.” 'The Belt and Road Initiative' promotes connectivity and economic development among participating countries, benefiting all parties involved and tangibly improving the well-being of the people in these jointly constructed nations. Has the BRI promoted Russia’s development? Could you share some examples or data with us?

Sergey Glaziev: According to the decision made by the leaders of China and Russia, they have officially proclaimed the integration of the Belt and Road Initiative with the Eurasian Economic Union.

Commencing this integration, we are utilizing the shared economic space of the Russian Eurasian Economic Union in order to create more opportunities for mutual investments together with the Chinese companies and development institutions. If we analyze the structure of these mutual investments, it becomes apparent that roughly half of these investments are in the transportation sector. Russia, as the geographically largest country in Eurasia, plays a huge role, commanding a significant portion of Eurasian continent. Its role in transit relations and connections between different countries is of paramount importance. It is quite clear that one of the most important advantages of the cooperation between Russia and other countries of Belt and Road Initiative is the modernization and construction of the new transportation corridors.

So, the primary focus of these initial investments lies in transportation infrastructure, including railroads, roads, and pipelines. The second important subject is electricity and energy. This sector occupies more than 20 % of mutual investments. Additionally, the construction of logistic centers of various commercial centers is also very important subject of our relations, accounting for approximately 20% of mutual investments between Russia and Belt and Road Initiative.

The Belt and Road Initiative is concentrated on the mutual investments. And today the mutual investments are a key locomotive for the treasure roles. We see the huge growth between the Eurasian Economic Union and China. Our cooperation, between Eurasian Economic Union and the Belt and Road Initiative, is based on the large-scale agreement about trade and economic cooperation between Eurasian economic countries and China, operates within a specially designed framework. A commission has been established to facilitate communication between our countries, outlining plans to promote economic cooperation, with a focus on investments and trade.

The results of this cooperative effort are evident in the remarkable growth of mutual trade. During the last 3 years, we have experienced an annual growth rate exceeding 30%. China has emerged as the region's largest partner, constituting approximately 24% of our foreign trade, 38% of our exports, and 18% of our imports. The whole volume of trade is expected to surpass $200 billion this year, representing a significant doubling of trade within the past three years. Notably, the trade level of $100 billion, reached five years ago, has now been effectively doubled, underscoring the success of our collaboration between the Eurasian Economic Union and the Belt and Road Initiative.

Capital News: The Russian-led Eurasian Economic Union (EAEU) is a key partner in China’s Belt and Road Initiative (BRI), since it comprises the majority of territories which the BRI’s overland route, the Silk Road Economic Belt, needs to traverse as it crosses Central Asia on the way to Europe. What impact does the deep alignment between the EAEU and the BRI have on Russia and the entire Eurasian region? In which areas do these two entities have cooperation prospects? What has been the current progress, and what achievements have been made so far? What aspects will be the focus of attention in the next steps?

Sergey Glaziev: As you mentioned, we witnessed significant growth in our mutual trade and joint investments last year. At the same time, we have been actively improving our collaboration in the fields of regulation of trade and cooperation. For instance, we have made a mutual effort in order to improve the customs regulations, to simplify the custom procedures, to harmonize the technical regulations, particularly in the oversight of food products.

And, of course, we've introduced digital solutions for our trade documentation, the documentation covering transportation and goods. Our cooperation extends to customs affairs, where we exchange experiences in electronic trade and logistics—undoubtedly, one of the most crucial aspects of our partnership. The dialogue on the questions of the trade policy is going on very quickly. At the moment, China has ascended as the leader among our trading partners, holding the top position as the primary foreign investor and a major partner for Russia and other countries within the Eurasian Economic Union.

Capital News: You mentioned at this year’s Moscow Economic Forum that China has set an example for how to manage economic development under modern conditions, and the experiences of Chinese-style modernization are instructive for countries aspiring to integrate into the new economic order of the world today. Could you please elaborate further on your perspective, what specific experiences from China’s modernization journey do you believe are worth emulating?

Sergey Glaziev: China has really become central to world economic development, and it happened largely attributable to its innovative institutional system for regulating its economy. China serves as a compelling example of successfully combining diverse economic approaches together. It adeptly combines the wisdom of centrally planned economies found in social countries with the insights gained from market economies. This integration involves blending central strategic planning with market competition, and the private entrepreneurship with government control over the money creation and price regulation.

By this, China has effectively fostered very good conditions for the growth of production or introduction of the new technologies. This opportunitie have materialized in the remarkable growth rates of the Chinese economy.

China’s another miracle, is based on the new system of management, which was elaborated in China, taking together the advantages of the socialist and capitalist economists together. China still has and will have, I’m sure, the socialist ideology within its political and social system, and at the same time market mechanism in its economic system. These factors coming together create a huge competitive advantage of the Chinese national economy, allowing it to pursue its own industry interests and great new opportunities for economic cooperation among countries. China shows the good examples of international cooperation in forms of mutual investments. China serves as a compelling model for many countries, demonstrating how various factors of economic growth can be effectively combined to enhance the well-being and incomes of the population.

The social ideology creates constraints for market regulation, and only those private entrepreneurs would support from the state who create models, offer more services and make more contribution for the overall well-being of the society.

This kind of regulation of market by the criteria of the growth of living standards and the growth of production, give us a very good example how the country can mobilize all the resources for economic growth. And results of a Chinese experience of a very high risk of current growth can be used in the other countries as well. This experience is not only pertinent to the realms of construction, economics, trade, and investment relations but also offers insights into creating opportunities for economic growth within our respective national economies.

While the debate around this approach persists, but I’m sure that China shows a good example for the whole mankind, how you can organize the mobilization of all economic resources in favor of the growth of the wellbeing, of the population. The Chinese model demonstrates the efficacy of combining central planning and strategic management mechanisms with market entrepreneurship and competition to achieve maximum efficiency.

China has become the center of the new world economic motor. It shows an example for other countries that what institutions, what methods of market economic regulation should be used in order to achieve specific results.

Nearly All Sino-Russian Trade to Be Settled in Local Currencies in the Future

Capital News: 'De-dollarization' is becoming a prominent topic in the international community. At this year's BRICS summit, Russia President Putin stated in a video address that the process of 'de-dollarization' among BRICS nations is irreversible and gaining momentum. During the Russia-Turkey summit on September 4th, Turkey President Erdogan expressed support for Russia's initiative to settle a portion of trade in local currencies, and the central bank governors of both countries will hold discussions on the specific steps for currency settlement. What are your views on 'de-dollarization,' and why have many countries around the world recently been initiating this trend of moving away from the U.S. dollar?

Sergey Glaziev: The structural changes of developing economies, which take place because of changes of technological and economic modes. As usual, unfortunately, they are going through the road-keeper tour. The United States and its European allies are trying to use the advantages in the world financial system for political purposes attempting to maintain dominance over the world's reserve currency. It is increasingly evident that this secret war initiated by the Americans and Europeans is bound to be lost.

Their once-competitive advantages, such as the creation of the world currency as the model for a political structure, have waned. There is a diminishing belief in the American and Western political systems, as well as skepticism about using their currencies as secure instruments for savings and investments.

America, for sure, is facing losses in this economic war waged against Russia, China, and other independent nations. However, the consequences of this war extend beyond individual nations and pose an escalating threat to global stability.

In order to avoid the further acceleration of American aggression and to create new opportunities in economic growth, we need more safe financial infrastructure. It couldn't use American dollar anymore, as well as European Euro, British Pound, or German Mark. For us, they all are toxic currencies, which are used by the Western countries, as an instrument of political pressure, and even as a weapon against independent nations, which are trying to pursue their own economic and social policy, in order to avoid the further damage.

In response to the arrest of Russian currency reserves and the exclusion of Russia from the Western financial system by the United States and its European allies, we have opted to distance ourselves from the use of Western currencies.

The reliance on the American dollar, euro, or pound as reserve currencies in trade and investments has diminished. Efforts are underway to minimize the use of these currencies within the Regional Economic Union, where approximately 85% of mutual trade is now conducted in national currencies. Notably, more than half of the trade between Russia and China is international currencies, and almost half of the export is already paid by Russian ruble. We are moving international currencies, and we are speaking about the introduction of the new essential currency, which will be based on the international treaty.

This moment couldn't be stopped because we cannot use western currencies anymore. It poses a huge political risk, potentially leading to a loss in export revenues. We have to construct new instruments, which we can use to finance, mutual trade, mutual investments, and promote our cooperation. Transitioning to national currencies in foreign trades is the first step.

The second step will be the digitalization of national currencies used in the international trade. This digitalization is necessary in order to avoid sanctions, because we can use digital currencies and blockchain technology to circumvent punitive measures enforced by international banks involved in global transactions. The second step entails establishing a market for national digital currencies and social digital currencies, facilitating payments and international settlements between our countries.

The third step will be the introduction of a new international digital currency in order to finance our mutual projects, and to finance our mutual trades, enabling settlements and payments. This new international digital currency should be based on the two baskets: the first basket is the national currency of the contrast involved in this agreement; the second basket is the basket of commodities collectively produced and consumed.

According to our economic mathematical model, introducing a currency based on these two baskets proves to be a stable instrument that avoids inflation, issued transparently among participating countries in this new international payment system. We can introduce this new international currency in the nearest future. The technical aspects of constructing this currency are already in place, as we have a pilot model. I hope that in the near futures, BRICS countries, along with participants in the Belt and Road Initiative, will come together for an international conference to present this new international currency economic model and sign international agreement for its implementation. The introduction of this international currency is imminent, based on the features outlined.

Capital News: Several countries, including Indonesia, Iran, Russia, Argentina, are gradually shifting towards using the Chinese yuan (Renminbi) in trade settlements or investments. As China steadily advances the internationalization of the yuan, enhancing its role in international affairs and its sovereignty, what recommendations do you have in this regard?

Sergey Glaziev: At the moment, as I mentioned earlier, we are conducting trade in national currencies and the share of national currency usage is on the rise. In the case of Russia, China, being a key partner in foreign trade and a major foreign investor, of course, should participate in our mutual financial system. The opportunity for various central banks from different countries to participate in the Russian payment system is significant. We have also opened trading between the ruble and RMB on the Moscow Exchange, where the share of RMB in Moscow transactions surpasses that of the dollar and the euro. Consequently, the use of RMB is increasing steadily, proving to be more suitable for our mutual trade and investments. I'm sure that in the near future, nearly all trade between Russia and China will be settled in ruble and RMB.

If you're speaking what's about other Eurasian Economic Union countries, we observe similar trends— an increasing preference for the use of national currencies.

However, trading in national currencies is not optimal, because the major problem which still exists is the price formation. Our commodities' valuation is still dependent on exchanges in the United States, England, and Europe. Relying on prices established in other countries introduces volatility to commodity prices, posing substantial challenges in trade relations. It is impossible to plan long-term investments with the very high volatility of the commodities.

To address this challenge, we have to create our own Eurasian price formation system independent of Western influences, where the major role in price formation is played by the international speculation. You have to get rich from international speculators and create opportunities to hold direct relations between producers and consumers of commodities. And we shall move from the speculative prices to the long-term prices, to create price stability, which is very important for the stable and sustainable development of our countries. Achieving this objective is possible only through the introduction of a new international currency, because international currency have their own specific characteristics that contribute to volatility. The new currency we propose will be very stable and very useful, very comfortable, offering convenience not only for payments but also for price formation.

In any case, in spite of the fact that the share of RMB and ruble in our trade is going up, it would be imprudent to dismiss the project of introducing a new international reserve currency. This initiative aligns with our mutual interests and should not be overlooked. This raises a crucial question regarding sales.

Capital News: On September 4th, Russia President Putin, while hosting an energy-related meeting, mentioned that despite facing overt hostile actions and unlawful restrictions and sanctions from some countries, Russian energy enterprises have continued to develop overall. They have also successfully found new reliable partners in foreign trade. How has Russia been affected by the sanctions, and have the sanctions initiated by the United States and Western countries been successful? What is your evaluation of the U.S. sanctions policy?

Sergey Glaziev: As we see, according to the statistics, the Russian economy continues to grow. The sanctions didn't place any important role for the growth rates of Russian economy. Despite projections from entities such as the World Bank and IMF, which anticipated a substantial decline of around ten percent or more in Russian GDP, the reality portrays a different picture. The Russian economy maintains robust macroeconomic indicators; key factors such as industrial production, GDP, and investment activity remain resilient. This reflects a commendable adaptation of the Russian economy to the evolving economic landscape.

In just one year, the share of Western countries decreased about 13 % in our trade. while the share of transactions with French-speaking countries increased by a corresponding 13%. The European Union, once the primary trading partner, has been eclipsed by China emerging as the principal contributor. Import dependencies on Western countries have been offset by internal production and imports from China and other allied nations.

The impact of Western sanctions on the Russian economy has been mitigated through a strategic shift in the structure of foreign trade. We emphasize transactions in national currencies rather than using dollars and euros. We don't use Dollars and Euro anymore. New institutions have been established to facilitate payments and transactions, averting damage to the internal and external economic fabric of Russia. So, the sanctions, rather than impeding growth, have served as a catalyst for creating fresh opportunities, fostering the development of new economic models, international relations frameworks, and growth-oriented institutions.

In essence, the imposition of sanctions has spurred Russia to explore innovative pathways for economic growth and activity, prompting a shift from a Western-dependent financial and economic architecture to a new framework designed for the collective well-being of all participating countries.

Pay No Mind to the Opinions of Those Countries

Capital News: The United States and some Western countries keep criticizing the comprehensive strategic partnership between China and Russia, stigmatizing their normal diplomatic dialogues and even exerting continuous pressure, urging the two countries to keep their distance. What are your thoughts on this situation?

Sergey Glaziev: Firstly, we should not care about the opinion of the unfriendly countries regarding our comprehensive strategic partnership. Being the two sovereign powers, Russia and China can build their relations according to their own interests.

Secondly, The leaders of our countries have regular meetings, the highest level of trust and mutual understanding. Our states hold similar positions on major foreign policy issues, and they almost always vote the same way at the UN Security Council.

Russia-China trade turnover is developing well: after the embargo on trade with Russia imports from China largely replaced the discontinued imports from Europe, exports of Russian energy resources and many raw materials were reoriented to China. However, China-US and China-Japan trade turnover, i.e., trade with unfriendly countries for us, significantly exceeds the similar China-Russia indicator of economic cooperation activity. The current business cooperation has even more modest results: in terms of the number of joint ventures and the intensity of cooperative ties with China, Russia has much more weak positions than ASEAN countries, Pakistan, India and even unfriendly countries. Russia-China scientific and technical cooperation also needs the more intensive development.

Thirdly, we need to work seriously on the real content of our strategic comprehensive strategic partnership. First of all, we need large-scale joint investment projects in high-tech industries, for example, such as the creation of a wide-body long-haul passenger aircraft, the construction of nuclear power plant, etc. It is necessary to stimulate the development of joint productions, the expansion of “cooperative cooperation”. To do this, we need to work out the mechanisms of targeted lending for such projects. We should develop close cooperation between our development institutions and large banks.

Fourthly, it is crucial to expand cooperation in the sphere of education and science. To do this, it is advisable to develop network forms of interaction between universities, the double diploma practice and academic mobility. Consortia and technological alliances are promising forms of cooperation.

Moreover, it is necessary to increase joint investments abroad in third countries. This activity strengthens trust and creates a synergy of Russia-China competitive advantages’ combining. A joint initiative of our countries to introduce a new international digital currency, tied to a basket of exchange-traded goods, would be very relevant and certainly be supported by other BRICS and SCO countries. Its introduction could make it possible to get rid of dependence on unfriendly countries – not only in the field of payments and settlements, but also in pricing – and facilitate the transition to a new world economic mode.