Closer ties with Russia bolster Beijing’s efforts to use its currency more in global trade

China’s use of the renminbi in cross-border transactions has reached record highs this year, as closer ties with Russia bolster Beijing’s efforts to internationalise its currency and cut dependence on the US dollar.

“The sanction situation created a huge stimulus for China to develop its [financial] system and to develop solutions to link China’s system with the Russian one,” said Alexandra Prokopenko, a research fellow at the Carnegie Institute in Berlin.

“By international standards it’s not a great achievement,” said Lai. At the same time, he noted, “they have obviously improved”.

Globally the renminbi is still a distant second to the dollar for trade financing. It also makes up just 4.74 per cent of global payments, behind the dollar, euro and sterling, according to the most recent data from international payments network Swift.

China “is not seeking to topple the dollar’s global dominance”, said McDowell. “That comes with a lot of responsibility and accepting certain vulnerabilities . . . China’s motives here are primarily about autonomy and resilience.”