text | Huashang Taolue Yueqi
Recently, India's largest cement manufacturer Chaoke Cement imported a batch of coal weighing about 157,000 tons from Russia's Siberian Coal Energy Company, which attracted great attention around the world.
There is no other reason - this trade between India and Russia was settled in RMB!
India paid a total of 172.65 million yuan in payment. Although the amount is small, this transaction involves the three largest emerging economies in the world - India, Russia and China. All three are members of the BRICs countries and are the largest economies outside the Western world. So many people believe that this is a representative event in the process of RMB internationalization.
At the same time, two trade sources familiar with the matter also said that the transaction was coordinated by the Russian company, and other Indian companies also used RMB for payment when trading with the Russian coal company.
From the data point of view, 170 million yuan is not much, but if we look back at the trade between India and China last year, we can find that India's trade deficit with China in 2020 was as high as 69 billion US dollars.
In other words, under normal circumstances, India will not have RMB in its hands, so in this transaction, the Indian company must have first exchanged the RMB with US dollars before paying the relevant amount to the Russian side. .
In view of the complicated bilateral relations between China and India over the years, we have reason to believe that India will not take the initiative to use RMB for settlement. Referring to the above information, we can confirm that the use of RMB in this India-Russia transaction should be the initiative of Russia. .
Generally speaking, when doing business between countries, the most common payment method is the use of U.S. dollars, especially for commodities such as fossil energy. . The reason why the United States has been able to maintain its economic hegemony on a global scale for so many years is because of its Binding the oil settlement method to the U.S. dollar has a lot to do with it. Therefore, the internationalization of the RMB that our country has been promoting for so many years can be said to be difficult.
In this context, it is not difficult to understand why this news has attracted such widespread attention.
This time, Russia took the initiative to propose settlement in RMB. It must have the following considerations.
On the one hand, after the conflict between Russia and Ukraine broke out, Russia was kicked out of the SWIFT settlement system by Western countries led by the United States. Even if it had US dollars in its hand, it could not spend it. This was why Russia forcefully demanded that European countries use rubles and for settlement. Oil, natural gas reasons. Instead of continuing to settle goods in U.S. dollars, it is better to switch to RMB, which can better circumvent sanctions from Western countries.
On the other hand, after the COVID-19 outbreak broke out across the world, only China in the world can continue to provide such a complete industrial chain, and because we insist on implementing dynamic zero-epidemic prevention measures, production efficiency is no better than before the outbreak. Therefore, as long as Russia holds RMB in its hands, it can purchase various materials that it is short of from China, such as light industrial products and mechanical and electrical products, and even high-quality infrastructure services.
Based on the previous St. Petersburg International Economic Forum China and Russia had serious talks and stated that they would continue to increase the trade volume between the two countries in the second half of the year. The Russians chose to use RMB for settlement. It would be very convenient to reserve more RMB foreign exchange for themselves. Normal.
Finally, after the war between Russia and Ukraine, the exchange rate of the Russian sovereign currency ruble collapsed. However, as the war progressed, the ruble exchange rate continued to rise. The exchange rate of 1 ruble to the US dollar has risen from the lowest point of 1:0.007. The current 1:0.018 is even far higher than the pre-war level.
The value of a currency that is too high is not conducive to the country’s export trade. Even the Russian Minister of Finance publicly stated on June 29 that he would lower the ruble exchange rate by purchasing the currencies of friendly countries, and Russia said that I believe everyone knows who the "friendly countries" are.
Therefore, at this time, Russia has begun to choose to use RMB to settle foreign trade . It is undoubtedly a win-win thing - it not only promotes the internationalization of RMB, but also effectively protects its own economic interests.
As one of the five permanent members of the United Nations Security Council, Russia’s move undoubtedly conveys a powerful political gesture to the outside world. I believe that in the future, more and more developing countries will choose to use RMB for settlement, which coincides with my country’s two major initiatives, the “One Belt, One Road” and building a community with a shared future for mankind.
In this major reshuffle of the world structure, we have undoubtedly occupied a very advantageous high ground.
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