China and Russia are forging an even stronger “financial path” with a new agreement, state visits

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China and Russia signed audit and surveillance agreements to facilitate bilateral capital flows and bond issuance, ahead of a two-day annual leaders’ meeting to discuss bilateral cooperation against the backdrop of US sanctions.

The neighbors signed a memorandum of understanding on Monday to harmonize the audit monitoring process and share more experience in public finance, taxation and budgeting, according to China’s Ministry of Finance.

Chinese Premier Li Qiang was scheduled to meet his Russian counterpart, Prime Minister Mikhail Mishustin, in Beijing on Tuesday and Wednesday. This is Mishustin’s second visit to China this year after the one in May. And it came just two months after Russian President Vladimir Putin attended strip and road peak in Beijing.
As part of China and Russia “no limits” A strategic partnership, Li and Mishustin were set to “exchange views on bilateral relations, pragmatic cooperation and mutual interests,” according to a Chinese Foreign Ministry statement.

“I wouldn’t say I’m optimistic” about relations with China, the US ambassador said

At Monday’s signing, Chinese Finance Minister Lan Foan spoke with his Russian counterpart Anton Siluanov about harnessing the cross-border financial potential between their countries.

“The coordination of Sino-Russian cooperation in multilateral formats once again confirms our common interest in strengthening cooperation on the financial track,” Siluanov said, according to Russian state news agency Tass.

And Siluanov said Russia and China should improve financial cooperation with their Brics counterparts – an association of five emerging economies: Brazil, Russia, India, China and South Africa.

In a separate meeting on Monday, Deputy Prime Minister He Lifeng and Russian Deputy Prime Minister Dmitry Chernyshenko pledged to advance key projects and expand areas of cooperation.

He Lifeng praised the “strong vitality” of bilateral cooperation in finance, production capacity, science and technology, communications, customs, environmental protection and urban construction.

“We will effectively solve the difficulties and problems encountered in our cooperation in time and create a better environment for cooperation,” he said, according to Xinhua.

The two also “reached different consensus and results”, although no details were provided.

Dong Jinyue, senior China economist at BBVA Research, said financial cooperation between the two countries is mutually beneficial.

“For Russia (there is) some immediate relief in its economic and financial turmoil since the US froze Russian assets… Russia can always use the (yuan) to settle its foreign trade payments and to ensure the safety of its foreign reserves by using the (yuan) as its reserve currency,” she explained.

‘Decent level’: Putin praises China trade as $200bn target smashed

While for China, Dong added, financial cooperation can help promote the internationalization of the yuan by using it in trade deals and becoming Russia’s main reserve currency.

Official data from China’s customs authorities showed that bilateral trade between the two countries rose 26.7 percent year-on-year to $218.2 billion from January to November.

China is now Russia’s largest consumer of energy.

At an annual press conference last week, Putin estimated that trade with China could reach a record $230 billion this year.

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