According to an Interfax wire of Sept. 28, Russia’s Economic Development Minister Maxim Reshetnikov told a meeting of the Federation Council, the upper house of Russia’s legislature, on Monday, Sept. 25, that “We need to probably do something similar to, say, the Chinese model, where there is a kind of membrane between the domestic ruble market and the foreign ruble market.” Reshetnikov said his ministry is discussing this position with the Central Bank of Russia (CBR), headed by Elvira Nabiullina. Interfax noted that Reshetnikov raised the issue in response to “high ruble volatility and inflation,” meaning that the value of the ruble has been dropping substantially over recent months due to capital flight and other financial warfare.
That same afternoon, Nabiullina’s CBR responded with guns blazing, attacking the proposal that Russia should follow the China model. “Restrictions on the movement of capital,” she argued, “are appropriate only as short-term response measures to support the smooth operation of the financial system amid significant risks to financial stability. The Bank of Russia believes that such restrictions cannot be an effective instrument of long-term influence on the market level of the exchange rate.” Nabiullina has been removing the capital and exchange controls that Russia put in place in the beginning of 2022, in response to London and Washington’s all-out financial warfare against the country, and is relying instead on orthodox monetarist policies of raising interest rates and allowing the free convertibility of the ruble into dollars.
Reshetnikov may have been the immediate trigger of Nabiullina’s lashing out against the China model, but it is well known that the main proponent of this idea in Russia is the renowned economist Sergey Glazyev, who delivered a presentation to the Moscow Economic Forum on April 4, “China. Experience of Modernization for Russia,” in which he focused on China’s credit policy for productive growth, and its elimination of super-profits and bubbles. He also presented his new book, Leaping into the Future: China and Russia in the New World Tech-Economic Paradigm, which is scheduled to be released in English on November 5, 2023.
