Progress to pick up in China-Russia financial ties

China-Russia cooperation in finance has been progressing smoothly but not at a high speed, and businesses from both countries are encouraged to use a yuan-ruble payment system in trade, a former Chinese central bank governor said on Wednesday.

The two countries have been working in finance for three years in areas such as collaboration in stake fund investment and in payment systems, but “it’s still not fast enough,” Zhou Xiaochuan, former governor of the People’s Bank of China (PBC), the country’s central bank, told a panel discussion on Wednesday during the ongoing Eastern Economic Forum, held in Vladivostok, Russia.

In October 2016, the PBC signed a currency swap deal worth 150 billion yuan ($21.8 billion) with its Russian counterpart to facilitate direct investment and bilateral trade.

“For now, the payment mechanism is still not widely used among companies, but has room to grow,” Zhou said.

Some Chinese investors in the Russian Far East said a yuan-ruble payment system in foreign-trade settlement of transactions could reduce currency risks in trade.

“However, not many business partners are willing to use it,” Wang Xiaodong, a businessman who has been investing in Vladivostok for two years, told the Global Times during the forum.

With the internationalization of the Chinese yuan, a methanol-to-olefins project operated by China State Energy Engineering Corp in the Russian Far East is now yuandenominated.

“It is a good way to avoid the fluctuation of foreign exchange rates, as many Chinese companies investing overseas face low profits due to currency risks,” said Liu Yunpeng, the company’s vice president.