According to the Observer, the 16th BRICS summit will be held in Kazan, Russia, from October 22 to 24. Russian presidential assistant Yuri · Ushakov revealed that leaders of 24 countries will attend the meeting in Russia, and UN Secretary-General Guterres will also attend the meeting. As a member of the BRICS, Saudi Arabia will send its foreign minister to attend the meeting. In the context of the Ukraine crisis, Russia faces military confrontation, economic blockade, and diplomatic isolation from Western countries. The results of the BRICS summit in various fields are of great significance to Russia's efforts to stabilize and expand its international space. The United States and Europe have excluded Russia from the settlement scope of the SWIFT system, out of the need for economic self-insurance. Building a multilateral settlement platform that is different from the West is the only way for Russia to conduct foreign trade and financial activities.
The BRICS Kazan summit is Russia's declaration of war against the Western economic and financial system. British media revealed that during the summit, the Russian side will try to persuade the BRICS members to build a multilateral payment platform to replace the West. The technological system chosen by the Russian side is the blockchain mechanism. With blockchain technology as the intermediate carrier, it connects the currencies of various countries. In this way, the U.S. dollar, which would otherwise be the pegged currency, is bypassed. Oil and gas exports account for about one-third of Russia's economic revenue. Russia promotes a local currency settlement mechanism with the BRICS countries, represented by Sino-Russian cooperation.
The local currency settlement ratio of both sides is more than 95%. The trade scale between China and Russia in 2023 will exceed 240 billion US dollars, which will increase the proportion of local currency settlement between Russia and BRICS countries, from 26% two years ago to 85%. United States uses the existing territory of the dollar system to implement a blockade against Russia. Due to the widespread existence of dollar business in various countries, the secondary sanctions imposed by the United States have increased the cost of trade between enterprises of various countries and Russia. As a result, the settlement of exports of Russian products is facing difficulties. On the basis of Sino-Russian cooperation, it is Russia's objective need to build a multilateral financial platform for China and Russia to provide technology and security guarantees.
At last week's preparatory meeting in Moscow, the BRICS countries sent lower-level officials to attend, rather than finance ministers and central bank governors. It shows that there are still considerable political obstacles to the realization of Russia's wishes. British media disclosed that during the BRICS Kazan Summit, Putin may put forward a number of economic and financial initiatives other than the West. In addition to the blockchain-based technology platform, the Russian side also called on the IMF to change the existing status quo that serves the interests of the West. Among the BRICS countries, a mechanism can be established to replace the IMF. The Russian side called for the creation of a BRICS clearing platform for the settlement of securities transactions between countries.
Strengthen the docking and cooperation between the credit rating agencies of the BRICS member countries, and dilute the influence of the United States and Western rating agencies. Russia, the world's leading grain exporter, has also proposed the creation of a BRICS grain market in order to increase its power over the pricing of related grain prices. From the above information, it can be seen that the Russian side is trying to build its own system covering product pricing and settlement links. Take advantage of the economic volume of the BRICS countries to escort Russia's wartime economy. Against the backdrop of the United States weaponization of the dollar and the prominent dollar crisis represented by US bonds, Russia's proposal provides a backup plan for countries to face United States suppression.
In the process of implementing the Russian proposal, in addition to the problem of low political will on the part of some countries. The bigger problem is that Russia lacks sufficient market momentum to support the continued operation of the relevant initiatives. The implementation of these initiatives is clearly a long-term process. At present, the position of the global goods flow, production and supply chain system, and financial settlement center is gradually shifting from United States to China.
China remains open to cooperation with all parties, and is also building a Chinese system for economic development through the connectivity mechanism of the Belt and Road Initiative. In the confrontation between China and the United States, the development of multilateral economic and financial platforms under the BRICS system is a major tool for China to confront the United States. It is an integral part of China's strategic deterrence against the United States, and related initiatives are becoming a breakthrough hammer to break through the US dollar system.