Beijing ready to help Russia's rattled economy, Chinese foreign minister says

PUBLISHED : Monday, 22 December, 2014, 5:57am
UPDATED : Monday, 22 December, 2014, 5:57am

China will support Russia in tackling its economic difficulties, while proposing greater use of the yuan to ensure safe and reliable trade between the two countries, senior Chinese officials say.

The rouble has fallen about 45 per cent against the dollar this year, and suffered particularly steep falls early last week. But Russian President Vladimir Putin has declined to call it a crisis, saying it will eventually rise again.

Speaking to mainland-linked Phoenix Television on the weekend on the sidelines of Premier Li Keqiang's visit to Bangkok, Foreign Minister Wang Yi said China was willing to help Russia, if it was needed.

"We believe Russia has the ability and the wisdom to overcome the current economic difficulties," Wang said.

The station did not quote Wang as mentioning any specific measures.

Also during Li's visit, Minister of Commerce Gao Hucheng said use of the yuan had been on the rise for years, but more so recently due to Western sanctions on Russia.

Gao said China and Russia had the capacity to achieve this year's trade target of US$100 billion. Last year, trade between the two gained 1.1 per cent to US$89.2 billion, according to Chinese customs figures.

"Capital investors may be more interested in a volatile stock or foreign exchange market. But in terms of concrete cooperation [between the two nations], we shall have a balanced mentality and push forward with cooperation," Gao said.

Cooperation on energy and manufacturing projects would not be greatly affected by the situation in Russia, Gao said. Beijing would instead focus on fundamental factors such as how the two economies complemented each other, he said.

Curtailing the influence of the US dollar fits well with Beijing's ambitions to increase the influence of the yuan and eventually turn it into a global reserve currency. With 32 per cent of its US$4 trillion foreign exchange reserves invested in US government debt, China wants to curb investment risks in the dollar.

Additional reporting by Reuters