The Shanghai Cooperation Organization (SCO) summit in Tianjin over Aug. 31-Sept. 1 announced plans to establish a Development Bank that will provide independence from Western-controlled financial infrastructure, such as Euroclear, Clearstream, and SWIFT.
Russia and China are leading the initiative, and details will be discussed at the upcoming Russian-Chinese financial dialogue, Russian Finance Minister Anton Siluanov told Izvestia. “We need to have our own independent payment infrastructure,” he said. “This is especially important against the background of sanctions, when the financial channels of the West became inaccessible not only to Russia, but also to other partners.”
After Russia launched what it calls a “special military operation” in Ukraine in 2022, Western governments and financial institutions have done their best to isolate Russia from what had been the global financial system. Hence the need for a payment infrastructure that is not controlled by Western institutions.
“We would like this bank … to create opportunities for our investors in our countries to be able to freely buy and sell securities in any country,” he added. “That is, to perform such an independent depository function in its own way.”
“We see that the existing banks—the Asian Infrastructure Investment Bank and the BRICS New Development Bank—are funded and lend in foreign currencies of non-participating countries. That’s why I say: if we create a new financial institution, let’s make it independent of Western currencies as well, so that you can freely lend to whatever and to whomever you want.”
Siluanov says that Moscow and Beijing have agreed to discuss these topics in more detail at the Russia-China Financial Dialogue later this year.
Already, China is working to open its domestic bond market to major Russian energy companies. (The much lower interest rates in China compared to Russia’s 17% current rate have significant appeal to the energy producers.)
Of course, the best resolution is to stop the fighting in Ukraine, end the NATO jihad against Russia and China, and roll back the sanctions that have contributed to splintering the world economy into separate systems.
