Moscow And Beijing Join Forces To Bypass US Dollar In Global Markets, Shift To Gold Trade

Tyler Durden's picture

The Russian central bank opened its first overseas office in Beijing on March 14, marking a step forward in forging a Beijing-Moscow alliance to bypass the US dollar in the global monetary system, and to phase-in a gold-backed standard of trade.

According to the South China Morning Post the new office was part of agreements made between the two neighbours "to seek stronger economic ties" since the West brought in sanctions against Russia over the Ukraine crisis and the oil-price slump hit the Russian economy.

According to Dmitry Skobelkin, the deputy governor of the Central Bank of Russia, the opening of a Beijing representative office by the Central Bank of Russia was a “very timely” move to aid specific cooperation, including bond issuance, anti-money laundering and anti-terrorism measures between China and Russia.

The new central bank office was opened at a time when Russia is preparing to issue its first federal loan bonds denominated in Chinese yuan. Officials from China’s central bank and financial regulatory commissions attended the ceremony at the Russian embassy in Beijing, which was set up in October 1959 in the heyday of Sino-Soviet relations. Financial regulators from the two countries agreed last May to issue home currency-denominated bonds in each other’s markets, a move that was widely viewed as intended to eventually test the global reserve status of the US dollar.

Speaking on future ties with Russia, Chinese Premier Li Keqiang said in mid-March that Sino-Russian trade ties were affected by falling oil prices, but he added that he saw great potential in cooperation. Vladimir Shapovalov, a senior official at the Russian central bank, said the two central banks were drafting a memorandum of understanding to solve technical issues around China’s gold imports from Russia, and that details would be released soon.

If Russia - the world's fourth largest gold producer after China, Japan and the US - is indeed set to become a major supplier of gold to China, the probability of a scenario hinted by many over the years, namely that Beijing is preparing to eventually unroll a gold-backed currency, increases by orders of magnitude.

* * *

Meanwhile, as the Russian central bank was getting closer to China, China was responding in kind with the establishment of a clearing bank in Moscow for handling transactions in Chinese yuan. The Industrial and Commercial Bank of China (ICBC) officially started operating as a Chinese renminbi clearing bank in Russia on Wednesday this past Wednesday. 

"The financial regulatory authorities of China and Russia have signed a series of major agreements, which marks a new level of financial cooperation," Dmitry Skobelkin, the abovementioned deputy head of the Russian Central Bank, said.

"The launching of renminbi clearing services in Russia will further expand local settlement business and promote financial cooperation between the two countries," he added according to.

Irina Rogova, a Russian financial analyst told the Russian magazine Expert that the clearing center could become a large financial hub for countries in the Eurasian Economic Union.

* * *

Bypassing the US dollar appears to be paying off: according to the Chinese State Administration of Taxation, trade turnover between China and Russia increased by 34% in January, in annual terms. Bilateral trade in January 2017 amounted to $6.55 billion. China’s exports to Russia grew 29.5% reaching $3.41 billion, while imports from Russia increased by 39.3%, to $3.14 billion. Just as many suspected, with Russian sanctions forcing Moscow to find other trading partners, chief among which China, this is precisely what has happened.

The creation of the clearing center enables the two countries to further increase bilateral trade and investment while decreasing their dependence on the US dollar. It will create a pool of yuan liquidity in Russia that enables transactions for trade and financial operations to run smoothly.

In expanding the use of national currencies for transactions, it could also potentially reduce the volatility of yuan and ruble exchange rates. The clearing center is one of a range of measures the People's Bank of China and the Russian Central Bank have been looking at to deepen their co-operation, Sputnik reported.

One of the most significant measures under consideration is the previously reported push for joint organization of trade in gold. In recent years, China and Russia have been the world's most active buyers of the precious metal. On a visit to China last year, the deputy head of the Russian Central Bank Sergey Shvetsov said that the two countries want to facilitate more transactions in gold between the two countries.

"We discussed the question of trade in gold. BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets," First Deputy Governor of the Russian Central Bank Sergey Shvetsov told Russia's TASS news agency.

In other words, China and Russia are shifting away from dollar-based trade, to commerce which will eventually be backstopped by gold, or what is gradually emerging as an Eastern gold standard, one shared between Russia and China, and which may day backstop their respective currencies.

Meanwhile, the price of gold continues to reflect none of these potentially tectonic strategic shifts, just as China - which has been the biggest accumulator of gold in recent years - likes it.

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Colonel's picture

Hmmm a gold backed currency. Wasn't Gaddafi in Libya going to try that? The Russians and Chinese might want to beef up their military. The banksters aren't going to take to kindly to that if they can't skim. All wars are bankster wars.

Shue's picture

The Banksters are taking it up the arse cause there's fuck all they can do about it.

Victory_Garden's picture


Here now, it is mystery night on the good ship, ZH.

Riddle you this, and get a night's shore leave for any who accurately figures this one out.

Our Sir President Trump did something a little strange of recent. He was going to sign some EO's on Trade and then suddenly walked out not signing the EO's.


So, here is the first entry to the mystery school of wonderment.

If you watch the facial reactions to what the speakers are saying, none cause a stir until Mike Pense says something. What was it said that may have ticked the Pres off? He said we wanted to increase Trumps face after that.


OK, crews turn. Give it your best shot. They say Lucy Juicy is giving freebee in town tonight, so be sure your entry is worthy.


quasi_verbatim's picture

Eurasia is the future of the world. Anywhere else is periphery.

Mimir's picture

"If Russia - the world's fourth largest gold producer after China, Japan and the US" !!!

  1. China 450.00 
  2. Australia 270.00
  3. Russia 245.00
  4. United States 211.00
  5. Canada 160.00
  6. South Africa 150.00
  7. Peru 150.00

(2016, Metric Tons)

Northern Flicker's picture

I was wondering how Japan got in there, not that I mean any disrespect to Japan, etc.

Toshie's picture

It should not be there .:).

Mimir's picture

Just a mistake ! It happens.

But Russia was probably not a mistake, but more wishfull thinking. The US is after Russia.

Russia and Chine are together producing some 700 metric tons far beyond the US.

Making Merica Great Again's picture



Dilluminati's picture


bhaaa bhaa buy gold buy silver

don't get fleeced, oh the humanity!


Fake Trump's picture

The demise of the US dollar is inevitable. America will be in big trouble with over twenty trillions dollar of debts. There is no way America can repay its debt. Mega inflation in the America is coming. Prepare for a Great Depression.

lakecity55's picture

There was a mysterious noise in the safe last night. I opened it up, and the Yuans and Rubles were partying with my Krugerrands. The place was a mess.

Manipuflation's picture

My Canadian Maples an American Eagles always end up playing hockey.  Never seems to work out for Team Merica though. 

Here, check out this fine used car per the used car market article from Friday.  You want to talk about being on bath salts?  I guess it was April Fools day yesterday after all. 


Farmer Joe in Brooklyn's picture

There's two sides to every market. 

The bid/ask spread on that piece of shit is going to be yuuuuge....

pparalegal's picture

Not getting invited to the ball should give the Brussel-crats and our neocons a little heartburn. 

Bammers's picture





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GoatHollow's picture

Your emphis on profit will mean NOTHING when you are looking at mushroom clouds on the horizon.

Dilluminati's picture

I logged on at sheepwave.

Other customers there were complaining about being fleeced.

Oh the sheeple


CHX13's picture

Thank you, captain obvious.

freedommusic's picture

The whole Russia narrative makes complete sense now. US globalist corporate empire is NOTHING without the dollar. The dollar goes, the empire goes.


Vilfredo Pareto's picture

The BRICS and Europe want a piece of the action.   


Or they are happy just to upset the checkerboard if they aren't allowed part of the Vig.


It seems awesome to be able to trade pieces of paper for goods and services, knowing ten percent will never be redeemed but held as "savings."    But it always collapses eventually.  It is a confidence game.

Vilfredo Pareto's picture

Gold does force trade balance, at least at the limit that one can continually export gold in a sustainable way.     The consequences are more immediate and obvious when trade imbalances happen.


No one country has the "exorbitant privilege" of printing over trade imbalances (or exorbitant curse long term in my view) in a physical asset based trading scheme.


We can't print physical yet (at least not in a price effective way lol)

CHX13's picture

Physical gold is the (final) means to balance ALL monetary imbalances that have accumulated over the last many decades. The current prices are a effing joke and when IT happens, fiat currencies won't trade down in gold terms, they will free fall straigth through many floors and shock (if not ruin) all the paper pushers on the way down into the abyss of monetary history.

daveO's picture

A war would trigger "IT". At some point, China may want to trigger this war.

Omega_Man's picture

US Dollar is worthless, except you don't know it yet....


China-Russia please announce gold backed trade notes ... and ask your citizens to buy gold.... tell Merica that US dollar is not taken for goods 

Xena fobe's picture

That would mean the end of trade with China.  Great news!

Omega_Man's picture

US dollar = monopoly money 

CHX13's picture

Just get all extra dollars you own in nickels and you should be doing ok. 

CHX13's picture

US cornered Russia, so they simply said "F U" and turned to China and established a peaceful and golden relationship. That's one thing that Jim - golden jackass - Willy actually got 100% right (hat tip to him). For several years now he made the call for gold-backed trade, starting in the east. This golden roadblock will be a can too heavy to simply kick further down the road. This is financial wAUr raging, right here and right now.   

Bopper09's picture

I agree, Jim has always been highly critisized because he wasn't right in the first few months, but I like him for the elusiveness and the ability to see more than 6 months ahead, which in the west has been almost an impossiblility.

Xena fobe's picture

"Golden relationship"?  What does that even mean?  Chinese use the term "golden" everywhere.  What if Americans used the word "dollar" like you use the word golden? 

CHX13's picture

It means that ultimate settlement is in gold and not dollars, or in currency that is fully or at least partially backed by gold. The dollar will lose its importance and with it much its current purchasing power, at least vis-a-vis gold, the ultimate hard currency.

CHX13's picture

Maybe. But as the de-$-ization by the rest of the world continues, more QE-$ would be like putting more oil into the fire, though this was the "recipe" of the past and they might try to do more of it, though I am convinced it will NOT avert a day of reconing in gold terms.

Hannibal's picture

Cover-Up Of Terror I-85 Bridge Explosion In Atlanta Now Underway

,....diesel fuel barrel bomb with PVC pipe bomb internal warhead igniter(see pic)

"The power of using PVC pipe bombs to blow up 50-gallon barrels of diesel fuel, this report further notes, cannot be underestimated in its destructive power—and as evidenced by the SVR documenting two videos (see below) in this report—the first exhibiting a massive fire caused by just 75 gallons of diesel fuel, the the second showing the diesel fuel burning under the I-85 bridge in Atlanta."


tbone10's picture

Yhea, your the trash clogging it asswipe

Collectivism Killz's picture

Don't worry. I just checked CNN and they said everything is fine.

VanillaSkyGuy's picture

the majority of you have no idea what you are talking about.  country with the strongest military will have the dominant currency. 

Davidduke2000's picture

China will have the dominant military as they can build 20 fighter jets for the price of a single F35. the numbers of soldiers, tanks, aircrafts and subs are staggering and they are all new, they are building brand new ICBMS  compared to 70's ICBMS from the us.

In reality Russia has the Upper hand because it already has brand new stuff, but they also have the ultimate weapon that can disable an entire aircraft carrier rendering it sitting duck.

metanoic's picture

Russia is also in a great position to play the war of attrition because they have something the US sorely lacks and/or is depleting like they're going out of style - natural resources, especially freshwater.

FBaggins's picture


Exactly. In 20 years China will have the strongest military.  Tony Blair a past PM of Britain, the man who is trying now to lead that nation back to the EU, was preaching a few years ago that as economic power is shifting to China so will military power. What he went on to say that we just have to accept it.  That is the thinking of the US and globalist establishments. For the past 25 years they have been pouring capital investments into that nation making themselves enormously rich in the process, without giving a damn about jobs, manufacturing, the imbalance of trade, foreign debt, of the growing military process of that totalitarian nation. These globalists view nations a thing of the past, but on any careful analysis it appears they are more interested now in the rapid deconstruction of Western nations than China or Israel, whose regimes for some reason they do not mess with.

metanoic's picture

I've been compiling articles on this for awhile now. You might enjoy these. Corbett has done alot of good work decoding this on going process.



metanoic's picture

When a country is run by traitors it's never a bad idea to rely on foreign sources for critical weapons & targeting system components.

"Some policymakers were concerned that China had cut its rare earth exports and appeared to be restricting the world’s access to rare earths, with a nearly total U.S. dependence on China for rare earth elements, including oxides, phosphors, metals, alloys, and magnets."

10mm's picture

Who has the strongest military? U.S.? Full of what's left over it's solders vs fresh young dedicated soilders.

Davidduke2000's picture

They have to start by destroying the comex, otherwise they will be giving their gold away. precious metals are so rare that cannot be traded on paper like iron ore or aluminium , paper contracts should be eliminated and only people or entities who own real gold can sell them , this will give the true value of gold.

GoldHermit's picture

Better be stacking. US neocon libbies have messed this up bigly.

Bill of Rights's picture

I see so the " Russians did it " just like the " Iraqis did it.... the puzzle is complete.