“Each country should think about building economic and financial security by, you know, having alternative ways. Otherwise, it’s very dangerous to rely on America,” he told the Post in Beijing.

“Dollar rules the world at the moment … America is using it as a weapon, because by imposing the sanctions they are eliminating some economic competitors. They’ve got some advantages. But mainly they are using it for political or even military [purposes],” he said in English.

Kostin is part of a large delegation, led by Russian Premier Mikhail Mishustin, that kicked off a state visit to China on Tuesday.

Given unprecedented sanctions imposed by the US and its allies in response to Russia’s invasion in Ukraine in February 2022, Russia has turned increasingly reliant on China, which keeps buying bulk quantities of Russian crude oil, natural gas and farm produce.

VTB Bank, which employed 40 people at its Shanghai subsidiary from 2008 and advised on Russian aluminium giant Rusal’s Hong Kong public offering in 2010, can play an important role in broader China-Russian cooperation, in which President Xi Jinping has called for “further tapping the potential” and “creating more growth points”.

Like most state-owned Russian banks, VTB was put on the US’ sanction list in February last year and subsequently denied access to international financial messaging service Swift and the US dollar.

“We are quite sure that today they’re using [financial sanctions] against Russia because they’re not happy with Russia. Tomorrow they can use it against China because there’s also conflict areas between America and China, Taiwan or other things,” he said.

Beijing, which has seen tensions with Washington escalate since their trade war kicked off in 2018, has been frequently warned that China could face severe consequences for standing together with Moscow, with their trade items scrutinised by Western officials.

Chinese officials have criticised Washington’s “weaponisation” of the US dollar, which, together with the US Federal Reserve’s accumulative 500-basis-point rate hike since March 2022, has resulted in many countries reducing their holdings of US Treasury bills or considering using other international currencies.

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The price of financial decoupling is large, as seen with VTB.

The bank alone posted a net loss of US$6.2 billion last year after its business in dollars and the euro was discontinued and its offices in London and Germany were shut down. A year earlier, it reported profits totalling US$4 billion.

“We are now working solely in the rouble area, and in addition what we call the ‘friendly’ currencies,” Kostin said, adding that this year is going to be “quite successful” with billions in net profits.

Increasing overseas use of yuan is widely seen as an important means of countering the US’ dollar dominance.

In addition to technical issues such as yuan convertibility, China’s capital controls and the stability of its value, the yuan’s single-digit shares in international payments, trade finance, forex transactions and foreign reserves remain far behind those of the US dollar and euro.

But Russia’s embrace of the yuan – with nearly 11 per cent of Russian deposits now in yuan and about 70 per cent of bilateral trade conducted in roubles and yuan – has significantly raised regional interests in the use of the Chinese currency.

“I think that is a good opportunity, in my opinion, for China to make the yuan an international currency,” said the veteran Russian banker.

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“It would be an interesting idea to try to implement the digital currency for BRICS countries,” he added, referring to the association of leading emerging markets that comprises Brazil, Russia, India, China and South Africa.

VTB is currently servicing only about 4 per cent of China-Russian trade, which rose by nearly 30 per cent in 2022 to US$190 billion, and both sides aim to reach US$200 billion this year.

The Russian bank is looking to increase its share of that bilateral trade to about 15 per cent, with business-expansion plans that include adding 20 more workers to its Shanghai office.

“I think there’s a good time, too, to bring more business from China to Russia, because Russian assets are priced lower than their actual value,” Kostin said. “Many Western companies are leaving Russia. That’s a huge market for China.

“We would like to have more joint ventures in Russia with the participation of Chinese companies – not only buying goods, but also bringing technologies and building some factories, producing something inside the country. Perhaps the countries should look at much more cooperation in innovation, logistics, agriculture, [and] chemical production.”

VTB has expressed interest in joining China’s CIPS because doing so would simplify transactions and make them more secure. The bank had said it would raise the issue at a meeting with Chinese central bankers this week.

Despite some bureaucratic obstacles, Kostin said, both sides are working to overcome them, given the “very friendly” relationship between top leaders.

“We are natural partners,” he said.