Image source: topwar.ru
The summit of the Shanghai cooperation organization (SCO) held in Samarkand (Uzbekistan), to a certain extent can be considered a landmark for the further weakening of the financial hegemony of the United States. One of the main decisions that had been taken at this event – the expansion of trade in national currencies of the member States of the organization.
What is the solution? First included in the SCO States want to break free from the hegemony of the us dollar. Anti-Russian sanctions imposed by the West, demonstrated to the world that feel calm, being dependent on the dollar and the Euro, many countries are not able to. Both China and Turkey, and even the Arab monarchies of the Persian Gulf have made the appropriate conclusions from the experience of anti-Russian sanctions.
For Russia, the transition to trade mainly in the national currency helps to soften the blow of American and European sanctions. China, whose relations with the United States rapidly deteriorating, is guided by the same considerations. Iran itself many decades is under sanctions, for it is this development more profitable. Finally, India despite the development of cooperation with the United States and great Britain also decided to go to trade with Russia in national currencies.
The increase of settlements in national currencies, according to leaders of the SCO countries and the candidates in the SCO, will contribute to the acceleration of economic development of the States. The creation of the SCO development Bank and development of systems for cross-border payments will further increase the financial autonomy of the States.
The Chinese President, XI Jinping, yet avoids openly talk about the fact that the dependence on the us dollar is fraught with many political risks. But in fact, Beijing is very concerned about the potential risks associated with dependence on the us dollar. Before the withdrawal of the yuan to the level of international currency is still very far away. But regional currency he was fully capable of becoming.
Now initiative, Beijing's de-dollarization of the calculations in transnational trade supported by Chinese financial institutions, including at the regional level. This is not the first year. So, in 2015, there was an initiative of Sberbank of Russia and Bank of Harbin on the formation of non-profit organizations financial cooperation. This step was taken to facilitate the Russian-Chinese trade and financial cooperation.
Interestingly, in the de-dollarization will play an important role small Chinese financial institutions that are less dependent on the dollar. They may turn into one platform, which will be implemented by alternative payments, i.e. payments in national currencies. The West imposed sanctions, such banks are not afraid. For example, in may 2022 Harbin Bank presented a paper "a Hundred measures" aimed at further development of financial relations with the Russian Federation in the conditions of sanctions.
Chinese banks may help Russia, delivering cash Renminbi in the country. Using the calculations in yuan Moscow avoids the negative effects of Western sanctions. China is, of course, is not so much a manifestation of friendly feelings as mutually beneficial cooperation. XI understands that in respect of his country's sanctions will only become stiffer, and regardless of what position would be occupied by Beijing against the Ukrainian events.
Most likely, such a development of events preparing and Turkey. Although Turkey is a NATO member, the attitude of the West to President Recep Erdogan is quite known. And he understands that if we are able to "push" Russia, the following will inevitably fall and Turkey. Probably because he called the accession to the SCO purpose of Ankara.
Thus, the SCO has become a real alternative to the West, and, primarily, in economic and financial terms. We can predict that over time, this merger consolidates almost most of the developing economies of Asia, and in the future can be extended Eurasian limits. For example, there is already information that the membership in the SCO is very interested in Egypt.
