World Economy

Russia, China Vow to Fight New Trade Barriers

Putin says the world and global economy are coming up against new forms of protectionism today with different kinds of barriers that are increasing
Russia, China Vow to Fight New Trade Barriers Russia, China Vow to Fight New Trade Barriers

President Vladimir Putin appeared to take another thinly veiled swipe at Trump’s economic policies on Wednesday, a day after Russia and China vowed to stand together to fight protectionism.

“The world and global economy are coming up against new forms of protectionism today with different kinds of barriers which are increasing,” Russian President Vladimir Putin told a plenary session at the Eastern Economic Forum in Vladivostok, Russia, CNBC reported.

“Basic principles of trade—competition and mutual economic benefit—are depreciated and unfortunately undermined, they’re becoming hostages of ideological and fleeting political situations, in that we see a serious challenge for all of the global economy, especially for the dynamically-growing Asia-Pacific and its leadership,” he added.

Putin’s comments come as China and Russia appeared united on Tuesday after the leaders of both countries pledged to stand together to fight protectionism.

The comments were seen as a thinly veiled attack on US President Donald Trump who has implemented a massive package of tariffs on Chinese imports and threatened further sanctions on Moscow.

The US’ trade war and tariffs on China and sanctions on Russia, which started in 2014 due to its annexation of Crimea but increased due to allegations of Russian meddling in the US 2016 election, appeared to have brought China and Russia together.

Putin said Wednesday that Russia and its eastern economic partners should work to keep trade free of barriers.

“We’re convinced that in order for our region to continue to achieve high growth rates, and to remain a key participant in the global economy and trade, it should retain the spirit of economic freedom, to be the space of business initiative without sanctions, bans and political bias ,” Putin told delegates.

Putin said both countries were looking to use national currencies in their transactions, sidelining the dollar.

“The Russian and Chinese sides have confirmed the interest in more active use of national currencies in bilateral transactions. This will increase the stability of banking services for export-import amid continuing risks in global markets,” Putin said after talks, Russian news outlets reported.

 Xi Calls for Closer Bonds 

Putin and Chinese President Xi Jinping met at the forum for a round table discussion focused on inter-regional cooperation. Xi also appeared keen to foster closer relations with Russia, saying:

“Together with our Russian colleagues, we will increase fruitful co-operation in international affairs and intensify coordination . . . to oppose the policy of unilateral actions and trade protectionism,” Xi said, according to a Reuters report.

Xi wants more investment projects with neighboring Russia, at a time when the world is facing rising protectionism.

Speaking at the forum on Wednesday, Xi said Beijing’s relationship with Moscow was at an “all-time high” and there was further scope for investments in Russia.

“China has always been and is still a participant in development projects in the eastern part of Russia,” the Chinese leader told an audience in Vladivostok.

“We have unique geographic benefits. China and Russia are the biggest neighbors, we have solid political ties … Chinese and Russian relationships are at an all time high level,” Xi noted.

The Chinese president suggested both countries should continue investing in energy, agricultural projects, tourism, infrastructure an education. “There are deep and complex changes underway in the international situation, the politics of force, unilateral approaches and protectionism are rearing their head,” he said.

He added that “China is open for international cooperation” and is “willing to study” other opportunities with other countries.

 Dollar Remains Default Currency

An escalating trade war between the world’s two largest economies could persuade an increasing number of global investors to favor China’s yuan over the US dollar, the former People’s Bank of China Governor Zhou Xiaochuan told CNBC Tuesday.

Trading in the partly managed yuan—also called the renminbi—has been volatile over recent months, amid threats of additional US tariffs against China.

This comes after Trump said late last week that he was “ready to go” on tariffs targeting another $267 billion on Chinese goods “if he wants.” That would follow planned charges on $200 billion of Chinese goods in several industries, including technology.

Beijing has vowed to retaliate if Washington takes any new steps on trade.

Speaking on the sidelines of the EEF, Xiaochuan told CNBC that the US-Sino trade war could provide an “opportunity for faster growing of our renminbi use.”


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