China and Russia have agreed to expand their economic cooperation through a planned banking system, which analysts believe is aimed at supporting their militaries and undermining the U.S.-led global order. The two countries issued a joint communiqué to strengthen and develop payment and settlement infrastructure, including opening corresponding accounts and establishing branches and subsidiary banks. This move is seen as a way to facilitate smooth trade payments and reduce reliance on the U.S. dollar.

The agreement was signed during a meeting between Chinese Premier Li Qiang and Russian Prime Minister Mikhail Mishustin in Moscow. Mishustin emphasized that Western countries impose illegitimate sanctions, and the use of national currencies, such as the yuan and ruble, has increased significantly. The two countries have also strengthened cooperation on investment, economy, and trade, with the share of national currencies in mutual payments exceeding 95%.

Analysts are concerned that this cooperation could lead to Russia assisting 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 is concerned about China’s support for rebuilding Russia’s defense industrial base, particularly the provision of dual-use goods. Despite these concerns, some experts believe that China will not risk its economic ties with the West to support Russia’s military efforts.

The use of the yuan as a substitute for the dollar in transactions has become critical, with the Russian newspaper *Izvestia* reporting that up to 98% of Chinese banks are refusing yuan payments from Russia. However, the use of U.S. dollars through the Hong Kong Monetary Authority’s CHATS system remains a significant concern, as it allows transactions that are not visible to the U.S. government. This financial cooperation between China and Russia raises significant red flags for U.S. national security and global economic stability.