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Given China and India's refusal to enforce sanctions against Russia, this has gotten very interesting. https://www.cnbc.com/2022/03/14/columbia-university-on-c

Given China and India's refusal to enforce sanctions against Russia, this has gotten very interesting. https://www.cnbc.com/2022/03/14/columbia-university-on-china-helping-russia-with-impact-of-sanctions.html https://www.cnbc.com/2022/03/14/columbia-university-on-china... From an economic point of view, it appears both countries are sick of having to use USD as reserve currency. If China starts trading directly with Russia and other countries, using Yuan, we may see the USD losing power.

stef25 5y ago
Would it be beneficial to China to deal more (directly) with India & Russia at the cost of dealing less with USA & Europe?
- dmitrygr 5y ago
  Who said "less with USA". Do you think USA will cut trade with china/india just in spite? Without imports &cheap labour from there, USA'd be back in progress by a few decades as we do not manufacture much here anymore.
  - bluGill 5y ago
    The US does a lot of manufacturing, don't be fooled by the hype. Though I agree it would set back progress in the US to stop trade with China. There are a lot of things we get from China that will be hard to replace in the near term. However China is buying food from the US, so they have more to lose. (This depends on how Brazil reacts - if Brazil also cuts of China there isn't anyplace to get enough food)
- 999900000999 5y ago
  I strongly suspect China can do both. Even Europe is still dependent on Russian gas. https://www.theguardian.com/world/2022/mar/14/russian-gas-oil-boycott-mass-poverty-warns-germany https://www.theguardian.com/world/2022/mar/14/russian-gas-oi...
- bluGill 5y ago
  India is afraid of China and actively trying to trade less with them. China has been aggressive near India's borders in the recent past.
deleted 5y ago
[deleted]
throwmeariver1 5y ago
Wrong thread?
kasey_junk 5y ago
China trades directly with other countries than the U.S. today. They account for about 15% of global trade but the yuan is about 2% of the currency market. That, for context, is still the fifth highest currency. The reason people use USD (and the EUR) for global trade is liberal currency controls and long term economic stability. Perhaps China is approaching the latter but for the former the status quo of the yuan is on par with the current sanction regime of the USD and the EUR. Except that it exists for every trading partner and every transaction taking place in the yuan. The yuan is growing in importance naturally but before it becomes a global currency it has to be liberalized and no one knows what happens then. The CCP is pretty skeptical of liberalization and is going the opposite direction currently.
AlexandrB 5y ago
If China starts trading with Russia using the Yuan it's going to have to buy a ton of USD and other currencies to keep the artificially low Yuan peg[1] going. I don't think the USD is going to lose power in this scenario. [1] https://www.investopedia.com/articles/forex/030616/why-chinese-yuan-pegged.asp https://www.investopedia.com/articles/forex/030616/why-chine...

stef25 5y ago

Would it be beneficial to China to deal more (directly) with India & Russia at the cost of dealing less with USA & Europe?

dmitrygr 5y ago
Who said "less with USA". Do you think USA will cut trade with china/india just in spite? Without imports &cheap labour from there, USA'd be back in progress by a few decades as we do not manufacture much here anymore.
- bluGill 5y ago
  The US does a lot of manufacturing, don't be fooled by the hype. Though I agree it would set back progress in the US to stop trade with China. There are a lot of things we get from China that will be hard to replace in the near term. However China is buying food from the US, so they have more to lose. (This depends on how Brazil reacts - if Brazil also cuts of China there isn't anyplace to get enough food)
999900000999 5y ago
I strongly suspect China can do both. Even Europe is still dependent on Russian gas. https://www.theguardian.com/world/2022/mar/14/russian-gas-oil-boycott-mass-poverty-warns-germany https://www.theguardian.com/world/2022/mar/14/russian-gas-oi...
bluGill 5y ago
India is afraid of China and actively trying to trade less with them. China has been aggressive near India's borders in the recent past.

deleted 5y ago

[deleted]

throwmeariver1 5y ago

Wrong thread?

kasey_junk 5y ago

China trades directly with other countries than the U.S. today. They account for about 15% of global trade but the yuan is about 2% of the currency market. That, for context, is still the fifth highest currency. The reason people use USD (and the EUR) for global trade is liberal currency controls and long term economic stability. Perhaps China is approaching the latter but for the former the status quo of the yuan is on par with the current sanction regime of the USD and the EUR. Except that it exists for every trading partner and every transaction taking place in the yuan. The yuan is growing in importance naturally but before it becomes a global currency it has to be liberalized and no one knows what happens then. The CCP is pretty skeptical of liberalization and is going the opposite direction currently.

AlexandrB 5y ago

If China starts trading with Russia using the Yuan it's going to have to buy a ton of USD and other currencies to keep the artificially low Yuan peg[1] going. I don't think the USD is going to lose power in this scenario. [1] https://www.investopedia.com/articles/forex/030616/why-chinese-yuan-pegged.asp https://www.investopedia.com/articles/forex/030616/why-chine...