Sunny Cheung
Beijing has tracked Russia’s response to what it perceives as financial warfare from the United States and its allies and has begun mitigating its vulnerabilities and building an offensive toolkit in response.
Chinese experts take confidence from Moscow’s resilience in face of more than 21,000 sanctions imposed since February 2022, and also quietly praise Russia for accelerating the internationalization of the renminbi (RMB).
The PRC now is prioritizing financial security over maximizing investments returns, pursuing reserve diversification, capital controls, anti-sanctions legal instruments,
and accelerated development of alternative infrastructures like the Cross-Border Interbank Payment System (CIPS) and a digital currency–based settlement platform, Project mBridge.
Dedollarization has been helped by Russia’s use of the RMB for energy, commodities, and bond issuance, as well as for some trade with partners like India and Brazil.
Hong Kong also plays a central role, and has become a testing ground for Beijing’s financial reforms.
Despite progress, the RMB accounts for a small proportion of global payments. Without full capital account liberalization,
its credibility and usability remain constrained—posing a core dilemma between financial openness and domestic control that Beijing has yet to resolve.
Three years after the United States and its allies imposed sweeping financial sanctions on Russia following its full-scale invasion of Ukraine,
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