China and Russia have agreed to expand their economic cooperation, raising concerns among analysts. The two countries have signed a joint communiqué to strengthen their payment and settlement infrastructure, including opening corresponding accounts and establishing branches and subsidiary banks. This move aims to facilitate smooth trade payments and support their militaries, potentially undermining the U.S.-led global order.

During a meeting between Chinese Premier Li Qiang and Russian Prime Minister Mikhail Mishustin in Moscow, the two leaders emphasized the importance of using their national currencies, with the share of rubles and renminbi in mutual payments exceeding 95%. They also signed over a dozen agreements on economic, investment, and transport cooperation.

Analysts view this cooperation as a significant threat to U.S. national security. David Asher, a senior fellow at the Hudson Institute, noted that the bilateral cooperation could lead to Russia’s assistance to China in the Pacific and South China Sea in return for Beijing’s support for Moscow’s economy and industry, which aids Russia’s war efforts in Ukraine. The U.S. State Department has expressed concerns about China’s support for rebuilding Russia’s defense industrial base, particularly the provision of dual-use goods.

The use of the Chinese yuan as Russia’s most traded currency has allowed Moscow to mitigate the effects of sanctions, although some transactions have been delayed. Despite this, the Russian newspaper *Izvestia* reported that as many as 98% of Chinese banks are refusing Chinese yuan payments from Russia. The Hong Kong Monetary Authority’s Clearinghouse Automated Transfer Settlement System (CHATS) is also being used to settle transactions in U.S. dollars, which is not visible to the U.S. government.

Overall, the financial cooperation between China and Russia is seen as a strategic move to enhance their economic ties and potentially challenge the U.S.-led global order.