China is pushing for more international trade settlements using the yuan, aiming to reduce its dependence on the US dollar. Chinese leader Xi Jinping signed an agreement during his recent trip to Russia, specifying that both countries should steadily increase the proportion of yuan clearing in bilateral trade, which China is also discussing with Brazil, Mongolia, Iraq and Saudi Arabia. As one expert noted that the primary motivation for this was political rather than economic, saying that if enough people outside China start relying on the yuan, it could help it resist financial sanctions.
Meeting notes: China is making efforts to promote the internationalization of the renminbi and reduce reliance on the US dollar for trade settlement. It is actively pushing for the use of the renminbi in bilateral economic and trade transactions with countries such as Brazil, Mongolia, Iraq, and Saudi Arabia. Meanwhile, China has signed a comprehensive cooperation agreement with Iran, leading some to speculate that the two countries may bypass the US dollar in settling their trade. However, experts point out that the renminbi’s limited convertibility and lack of international trust mean it cannot replace the US dollar as the world’s primary reserve currency.