Renminbi (RMB)/Yuan Appreciation & Internationalization

tphuang said:

time to work something out with Venezuela and invest more in their local economy

Please, Log in or Register to view URLs content!

Click to expand...

They tried that and it failed.

Yes, China should support any country working against the US. But Maduro doesn't have a good track record at leading his country. He was given a lot of money and has achieved little. Better to be careful

TK3600 said:

I suppose as Chinese banking and Russia integrate, Iran will merge with China too?

Click to expand...

China probably doesn't want to have its whole financial system lose access to the West. But there could be a set of banks that only provide financial services to sanctioned countries. Just like China has specific oil refineries that specialise in sanctioned crude or tech companies that develop products specifically for the African market

That RMB-settled LNG cargo has arrived:

i wonder assume Zoltan knows what he is talking about here.

Quan8410 said:

Please, Log in or Register to view URLs content!

Europe is screwed and Euro will be replaced by Yuan. Euro is not a serious competitor of USD in the first place.

Click to expand...

Euro is even softer than GBP in many aspects. The British finance industry and trade deficit make GBP easy to obtain and useful for investments. These are less true for Euro.

siegecrossbow said:

CIPS -- making Taylor the only relevant SWIFT since 2015.

Click to expand...

lol

Brilliant !

both good and bad in this. More usage of Yuan is good, but it might become the currency of trading for the broke and sanctioned.

> 70% of china/russia trade now settled in local currency

on CNY & THB settlement in their trades. A lot of improvement available here

In 2022, Thai exporters used yuan for trade settlement totalling 0.5% of export value, rising from 0.1% in 2015, according to K-Research. Thai importers used yuan for trade settlement valued at 1.9% of total import value last year, increasing from 0.4% in 2015.

This is in line with Thai exports to China totalling 12% of export value, while imports from China comprise 23% of the total value

Click to expand...

by the way, on a separate note, feel free to listen to Zoltan talk about currencies

They will use the Iranian national currency, the rial, and the Indonesian rupiah for trade

ACU with 9 members intend to establish a payment system within a month to rival SWIFT. Russia was invited and members discuss expanding memberships to other countries.
Members of the Asian Clearing Union (ACU), a regional banking bloc that seeks easier clearing of payments between its member states, have agreed to launch a system that will rival the SWIFT international payment network.

Asian Clearing Union is a payment arrangement whereby the participants settle payments for intra-regional transactions among the participating central banks on a net multilateral basis.

The main objectives of the clearing union are to facilitate payments among member countries for eligible transactions, thereby economizing on the use of foreign exchange reserves and transfer costs, as well as promoting trade and banking relations among the participating countries.

Currently, the members of ACU are the central banks of Iran, India, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, Sri Lanka, and Myanmar.

Russian banks reached out to CIPS​

Russian banks immediately became interested in CIPS, although the system is still very young. VTB was one of the first to join, back in early 2015. According to the Chinese system itself, almost 1.5 thousand participants in 110 countries are connected to CIPS. What is this system and is it able to simplify the calculations in yuan?

Photo: Oleg Elkov/TASS

About 30 banks from Russia have already joined the CIPS bank transfer system,

Please, Log in or Register to view URLs content!

writes . The Chinese CIPS system is still very young. It appeared in 2015, a year after the Bank of Russia Financial Message Transmission System was launched. The Chinese platform specializes in cross-border clearing of RMB payments. Its mission is to promote the global use of the PRC currency.

Russian banks immediately became interested in CIPS. VTB was one of the first to join, back in early 2015, Vedomosti

Please, Log in or Register to view URLs content!

True, only residents of China or their subsidiaries can be direct participants in the system. Russian banks interact with it not directly, but through Chinese correspondent banks. The very connection to CIPS is a complex process, the Chinese side cannot cope with the flow of applications, and some Russian banks are waiting for approval for several months, the newspaper notes.
Financial analyst Vladimir Shevchenko, editor-in-chief of Finnews.ru, says about what gives Russian banks participation in this Chinese system:

Vladimir Shevchenko
chief editor of Finnews.ru, financial analyst

“Large and largest banks that fell under Western sanctions have joined in order to carry out foreign trade activities somehow. Those banks that did not fall under the sanctions, by and large, do not need the Chinese analogue of SWIFT, they are still connected to SWIFT until now, until they fell under the sanctions. Since it is unlikely that anyone will officially tell everything, we can only assume that, most likely, the Russian banks that fell under the sanctions connected to the Chinese analogue of SWIFT in order to carry out foreign trade operations with the rest of the world through it.”

Here you need to clarify: with the rest of the world, where the yuan is accepted. Payments through Chinese CIPS in the US or the EU are still in the realm of fantasy. But American and European regulators do not see what is happening in the Chinese system, which payments go where. That is, for Russian participants, settlements through CIPS can be called safe.

But the very information about which Russian banks have connected to the Chinese system is not a secret. However, the Chinese do not yet have reason to fear secondary US sanctions. This is the opinion of the lawyer, partner of the NSP Law Office, an expert in sanctions law Sergey Glandin:



partner at NSP law firm, expert in sanctions law“

There are risks, of course, but I assess them as rather insignificant. No U.S. national security interests are violated here. None of their interests in foreign policy. This is purely our business with the Chinese, so I don’t see any direct grounds here for any sanctions to be applied to someone, for example, to this Chinese system. I don't think the United States would take such a drastic step because it could further worsen and complicate US-China relations."

According to

Please, Log in or Register to view URLs content!

Chinese system itself, as of April 23 this year, almost 1.5 thousand participants in 110 countries were connected to CIPS. Official statistics on the use of the Chinese system are either not publicly available at all, or they are available only in Chinese. Various publications

Please, Log in or Register to view URLs content!

the following data: in 2021, CIPS processed transactions worth about 80 trillion yuan, or almost 13 trillion US dollars.

But in practice, settlements between Russia and China through this system do not yet work. Alexey Ryazantsev, an entrepreneur engaged in the supply of electronics from the PRC, the author of the book "The Chinese: a guide for use," told about this:

Alexey Ryazantsev
Entrepreneur involved in the supply of electronics from the PRC, author of the book "The Chinese: an application guide"

“In fact, not everyone knows what it is and how to use it, even in China. That is, nominally, this system exists, it processes a certain number of transactions. But when you try to talk about it with Chinese suppliers or even with Chinese bankers, they don't really understand. At the moment, all payments that are sent from Russia to China in yuan, in dollars, or in some other currency, go through SWIFT. CIPS doesn't work. But, again, all the latest evidence is that more and more payments are in yuan, the number of payments in dollars is significantly reduced, and therefore there is a chance that there will be a gradual phase out of SWIFT.”

Two years ago, the first deputy chairman of the Central Bank, Olga Skorobogatova, spoke about the possible integration of CIPS with the Russian financial messaging system. But the matter has not gone further than talks.