Beyond the dollar and yuan: How Russia and China are rewriting the rules of global trade

From the report

The decline of the Chinese yuan’s share in Russia’s export settlements has been presented by Western media as evidence that US sanctions are succeeding in undermining Moscow’s financial independence. A recent Bloomberg report, titled “Russia’s Push to Replace Dollar With China’s Yuan Collapses,” argues that Washington’s threat of secondary sanctions has forced Chinese banks to retreat from Russian transactions, exposing the limits of Moscow’s efforts to move away from the dollar. Yet this interpretation overlooks a much more significant development: Russia and China may be changing the mechanisms of international trade rather than simply replacing one dominant currency with another.

The distinction matters. The future of global financial power may depend less on which national currency dominates trade and more on whether countries can conduct international transactions without relying on the Western banking infrastructure that has historically supported dollar supremacy.

There is little doubt that US secondary sanctions have created serious difficulties for Russian businesses seeking to use the yuan. Since mid-2024, Chinese financial institutions have become increasingly cautious about processing transactions involving Russian entities, fearing restrictions on their access to the US financial system. Payments have been delayed, rejected or returned, while Russian banks have had to reconsider yuan-denominated lending.