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During the Spring Festival, Russian President Vladimir Putin and Beijing gathered to participate in the grand opening ceremony of the Beijing Winter Olympics, an international event that attracted the attention of the world. Behind the meeting, however, there was profound energy cooperation and some interesting changes in payment methods.
The two leaders signed a series of cooperation agreements, one of which was high-profile on energy cooperation. Specifically, Russia will supply up to 100 million tons of oil to China through the Kazakh pipeline over the next decade to supply petrochemical companies in the Xinjiang region. The scale of the deal has raised widespread skepticism because the payment currency used for this cooperation is the euro, not the dollar. This raises questions about why China and Russia did not choose to use their respective local currencies, such as the renminbi or ruble, but chose the euro as a means of payment.
Some self-media have put forward explanations that China and Russia use euro payments to challenge the hegemony of the United States' "petrodollar". This hegemony is based on the dollar as the main payment currency for energy transactions, and the actions of China and Russia may signal a new trend that will gradually reduce the use of dollars in future energy transactions. However, this is not an easy decision, because the United States has always defended its "petrodollar" hegemony through military means, so only big countries like China and Russia would dare to try this new path.
The abandonment of the dollar in an energy deal between China and Russia is undoubtedly a challenge for the United States, but it raises more questions. Why not use a local currency, such as yuan or rubles? It has been explained that this is a tactical move by China and Russia in international politics aimed at weakening the alliance between the United States and the European Union. This seems plausible, given that the European Union has long wanted to make the euro an international reserve currency, and the United States has been trying to suppress the euro's rise. Energy trading between China and Russia is now settled in euros, which is good news for the EU but less pleasant for the US. If the United States chooses sanctions, who will be the target of sanctions? Is it sanctioning the EU?
This explanation seems reasonable, but from my personal point of view, it underestimates the status of China and Russia as world powers. Behind such major decisions there must be more conspiracy than petty conspiracy. The 100 million tonnes of oil deal sounds big, but it will be spread over 10 years, equivalent to 10 million tonnes per year. Converting this amount into euros is at most about 10 billion euros. This is only a small part of the global energy trade, and there is still a long way to go to shake the hegemony of the dollar.
From Yangmou's point of view, the use of euros for settlement is beneficial to both China and Russia. The euro is a freely convertible currency, and the European Union has established an international settlement mechanism, which is very convenient for bilateral trade. By using the euro as the settlement currency, China and Russia can bypass the dollar settlement system. If the United States imposes economic sanctions on China and Russia, China and Russia can ignore this threat, after all, the United States cannot unilaterally control the euro payment system. At the same time, both China and Russia have large trade volumes with the EU. China's annual trade surplus with the EU exceeds 100 billion euros, so it needs to use a large amount of euros, while Russia has almost completely cleared its foreign exchange reserves, making the euro a more convenient and secure international payment currency. Therefore, in many ways, the use of euros for settlement is of practical benefit to both China and Russia.
In addition, this decision is also in line with the views on the future world pattern in the joint statement of China and Russia. The two countries have clearly expressed their support for multipolarity and globalization, which also means that they no longer identify with the hegemony of the dollar, but support a future pluralistic international monetary system. Against this background, the use of euros for settlement is a reasonable choice.
In sum, the adoption of euro settlement for Sino-Russian energy transactions is a deliberate strategic decision to promote multipolarity and globalization, while also providing an alternative to countering possible sanctions. This is a strategy, a strategy on the table, and China and Russia have made their positions clear to the world, which makes the United States and the European Union have to face this new reality. How to respond will be up to them.
The use of euro payments in Sino-Russian energy cooperation has sparked widespread discussion and speculation. There are complex motivations and strategic considerations behind this initiative. First of all, we need to understand that this decision is not a simple small "conspiracy", but a conspiracy of a great power to reshape the international economic landscape.
One of the implications of this cooperation is multipolarity and globalization. The joint statement between China and Russia clearly shows that they support a multipolar international landscape, which means that they do not want the dollar to dominate the world. The use of euro payments is not only to circumvent the hegemony of the dollar, but also to support the diversification of the global economy. This is beneficial to the stability and sustainable development of the world economy.
From the perspective of China and Russia, there are also advantages to using euros for settlement. The euro is a freely convertible currency, and the European Union has established an international settlement mechanism, which is very convenient for bilateral trade. Moreover, when the United States imposes economic sanctions on China and Russia, the use of euro payments can bypass the dollar payment system and enhance the reliability of payments. China has a lot of trade with the EU and wants to diversify into the international monetary system, so supporting this approach also helps protect its economic interests.
Moreover, for the EU, this cooperation can be seen as an opportunity. The EU has always wanted to strengthen the euro's international standing, but it has been suppressed by the United States. Energy transactions between China and Russia are now settled in euros, which is a positive sign for the internationalization of the euro. This may make the EU more confident and continue to work to internationalize the euro and reduce its dependence on the dollar.
However, it should be emphasized that this is not a covert operation, but an open conspiracy. The Sino-Russian joint statement shows that their intentions are clear and that they support multipolarity and globalization, which is a bold strategic move aimed at reshaping the international economic landscape. This is a challenge for the United States and the European Union, and they need to take it seriously and develop a strategy accordingly.
To sum up, the use of euro payments in Sino-Russian energy cooperation represents a great power to support multipolarity and globalization. This approach would help to reduce dependence on the dollar, circumvent the dollar payment system and strengthen the international standing of the euro. It is also the embodiment of the vision of the world of the future between China and Russia, emphasizing their great power status and strategic considerations. However, this is not a small "conspiracy", but a conspiracy that is openly on the table and needs to be taken seriously by the United States and the European Union. How the future evolves will depend on the actions and reactions of all parties.
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