One benefit of being the World Reserve Currency and the largest economy is the ability to emplace sanctions or control measures on uncooperative nations. This has worked for many years, but China and Russia can work out complex scenarios to avoid American sanctions faster than the U.S. Government and its Allies can emplace new measures.
In May 2024, President Putin conducted a visit to China to meet President Xi. Out of this visit came a Chinese/Russia language statement that was filled with six references to a “New Era” in the word. The real meaning of the term “New Era” from the statement is a world environment without the dominance of the American led, world economic system. In June, the U.S. Treasury Department sanctioned Russia’s VTB Bank, the Russian bank with a major Shanghai, China branch to help restrict the flow of war material to Russia.
But in May since Putin’s visit to China and pre-dating the U.S. Treasury move, specially authorized new banks were already being set up in Chinese border regions which allowed Russian firms to open non-resident accounts (NRA) with Chinese banks, a financial ju-jitsu that largely nullified the new American Sanctions when they were emplaced in June. A brilliant tactical maneuver by China and Russia that anticipated the American targeting of VTB Bank. More evidence that plodding and laborious US control measures were being neutralized before they were even in place.
Hellbound and Down 