Chinese businessman Wang Ming is delighted with Russia’s acceptance of the yuan, China’s currency. His LED lighting company can contract Russian customers in RMB instead of dollars or euros, and they can pay him in that currency—a win-win situation. His plans changed after the conflict in Ukraine and subsequent Western sanctions on Moscow, which banned Russian banks and many of its companies from using dollar and euro payment systems. In the past, its contracting activities in Russia have been limited, but now it is preparing to invest in warehouses there. “We hope next year sales in Russia will amount to 10-15% of our total revenue,” said a businessman from China’s southern coastal province of Guangdong, whose annual income of about $20 million comes mainly from the African and South African markets. . America. In addition, Wang is looking to capitalize on the rapid “yuanization” of the Russian economy this year as the country isolated from the West seeks economic security from the Asian powerhouse China. He sees Chinese exporters reducing their foreign exchange risks and making payments more convenient for Russian buyers.

And while the yuan (or yuan) has been gradually making inroads into Russia over the years, that slow process has turned into a sprint over the past nine months. The currency has swept the country’s markets and trade flows, according to a Reuters survey of data and trade flows based on interviews with 10 people from the business and financial worlds. And the shift of Russia’s economy to the east could stimulate cross-border trade, become a growing economic counterbalance to the dollar, and curb Western attempts to pressure Moscow through economic means.

Total trading volume for the yuan-ruble pair on the Moscow Stock Exchange rose to an average of almost 9 billion yuan ($1.25 billion) a day in October, according to data analyzed by Reuters. Previously, they rarely exceeded 1 billion yuan in an entire week.

“It so happened that holding traditional currencies – the dollar, the euro, the British pound suddenly became very risky and expensive,” said Andrey Akopyan, chief executive of the Moscow-based investment company Caderus Capital, citing the potential risk of a bank with deposits. in foreign currency are subject to a fine. “Everyone was motivated to change something and even pushed towards the ruble or other currencies, including, above all, the yuan.” Indeed, yuan and ruble trading volume reached 185 billion yuan in October, more than 80 times the level of February, when Russia launched what it describes as a “special military operation” in Ukraine at the end of the same month, according to details. transactions. Finally, heightened interest has seen the yuan’s share of the foreign exchange market jump to 40%-45% from less than 1% at the beginning of the year, said Dmitry Piskulov, head of international projects for the Moscow Exchange’s foreign exchange department.