China-Russia trade surge lifts yuan use, but Russians would ‘give right arm’ for US dollars
- China’s total exports to Russia grew to US$76.12 billion in 2022, representing an increase of over 12 per cent compared to a year earlier
- Russia’s economy has been hit by Western sanctions as a result of its invasion of Ukraine, resulting in an increased use of the yuan
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Trade between China and Russia has grown significantly, catapulting the yuan to become a regional reserve currency for Moscow, but analysts said it will not help significantly internationlise its use as the move is “a sign of its desperation” with “no use” in everyday life in the largest country in the world.
Russia’s economy has been hit by Western sanctions as a result of its invasion of Ukraine, resulting in a broader use of the yuan after the Washington-led curbs restricted access to the US dollar.
“Recently, our Russian customers have begun paying us in yuan, before it was often the US dollar,” said Will Liu, a marketing manager for a Guangdong-based medical device exporter.
Right now, it’s a lot quicker and convenient, because it’s now paid in yuan
Receiving payment in the yuan is a huge advantage for smaller exporters like Liu, who focuses on the Commonwealth of Independent States – that includes the likes of Russia, Uzbekistan, Kazakhstan and Azerbaijan – and South American markets, as they are often exposed to foreign exchange risks that can increase costs.