Russia’s Response To European Capital Sanctions In One Word: China

Russia’s Response To European Capital Sanctions In One Word (ZeroHedge, Sep 9, 2014):

While the West continues to press the “Russia is increasingly isolated” meme, it appears – as we noted ironically previously, that Vladimir Putin is finding plenty of friends… most notably China. While threats of ‘asymmetric’ retaliation over European sanctions may have been enough to worry Europe’s leaders, the slew of news overnight regarding increased cooperation between China and Russia is likely more damaging to Western strategy (and egos).

Not so isolated…


h/t @PersonOfAwesome

As overnight news shows… China and Russia are ramping up their cooperation…

First, as Reuters reports, Russia and China pledged on Tuesday to settle more bilateral trade in rouble and yuan and to enhance cooperation between banks, Russia’s First Deputy Prime Minister Igor Shuvalov said, as Moscow seeks to cushion the effects of Western economic sanctions

Russia’s First Deputy Prime Minister Igor Shuvalov said told reporters in Beijing that he had agreed an economic cooperation pact with China’s Vice Premier Zhang Gaoli that included boosting use of the rouble and yuan for trade transactions.

The pact also lets Russian banks set up accounts with Chinese banks, and makes provisions for Russian companies to seek loans from Chinese firms.

“We are not going to break old contracts, most of which were denominated in dollars,” Shuvalov said through an interpreter.

“But, we’re going to encourage companies from the two countries to settle more in local currencies, to avoid using a currency from a third country.”

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So that blows the oil/gas funding sanctions plan out of the water as Russian firms will merely fund via China.

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Second, as RBTH reports, The Chinese company CNPC is to get up to 10 percent in Russia’s Vankor oilfields, Rosneft’s biggest production asset

Russian President Vladimir Putin announced the plan at the construction launch of the Power of Siberia gas pipeline on 1 September, business newspaper Kommersant reported.

“The plan will secure state support, and we will encourage your participation,” said Putin to the members of the Chinese delegation.

“There are no restrictions for our Chinese friends,” he said. According to Kommersant, the Chinese state company CNPC could get up to 10 percent in Vankorneft for approximately $1 billion.

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So that knocks another leg out of the sanctions stool as investment in energy infrastructure and technology is covered.

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And finally, as ITAR-TASS reports, Russian Railways are set to get RUB400 Billion investment from Chinese investors…

Chinese investors have expressed their willingness to invest 400 billion rubles. in the construction of high-speed highway Moscow – Kazan. Itar-Tass said the first vice-president of Russian Railways Alexander Misharin.

“Even today, the Chinese banks, China Development Bank in the first place, ready to raise the funding needed for this project, we are talking about the order of 400 billion rubles.” – Said Misharin, noting that the final decision on the construction of high-speed rail is in Russian government.

Misharin emphasized that the stated funds are sufficient to “provide funding for the project in terms of funds raised.”

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But apart from that, yeah Russia is isolated…

2 thoughts on “Russia’s Response To European Capital Sanctions In One Word: China

  1. Does anyone remember BRICS? It is about a month old.
    It is a coalition, an alliance between Brazil, Russia, India, China and South Africa. 67% of the world economy now is in their corner, the US is down to 33%.
    In Jan, 2010, the US dollar was involved in every international transaction in the world. Today, thanks to Russia and China, and the huge coalition they have built, that number is down to 33%……thanks to technology.
    The US leaders are feeling the squeeze and working overtime to drum up a war……that cannot be won. The US is broke, it has no allies or any coalition…….
    The US, during its years as the only superpower became the world bully…………and the entire world despises them.
    Putin moved quietly and mindfully, a master chess player…as the dumb asses in the US used to call that idiot Obama.
    Chess is more than a war game. It is a game to circle and corner your opponent so that either way he moves, he loses……it is called checkmate. I doubt Obama ever played it.

  2. One more question. What kind of idiots put sanctions on nations that stopped using the dollar in November of 2010?
    All these sanctions have accomplished is to cause nations to find ways around the dollar. 33% of world nations now use the dollar, down from 100% in Jan, 2010.

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