1/6 There is still a lot of talk about Russia shifting to the yuan so the sanction will only advance international use and status of the yuan vis-a-vis USD. This is seriously misplaced..
2/6 Russia-China trade did undergo de-dollarization over the last decade, but mostly through switching to euro. Russia has been running trade deficit with China (who doesn't?). Basically Russia uses the euro they earns in selling stuffs to Europe to pay for China imports..
3/6 In 2020 80+ % of Russia-China trade was settled in euro (carnegiemoscow.org/commentary/850…). If Russia-China trade shifts to yuan under the sanction now, it means Russia has to come up with the yuan to pay for its trade deficit with China...
4/6 Russia can get yuan thru the ruble-yuan swap line, using the now worthless ruble in exchange for yuan, and than use the yuan to pay for its trade deficit with China. In the end, it is little more than China giving out supplies to Russia for free as a disaster relief.
5/6 or Russia can absorb yuan by letting Chinese entities buy Russian assets and pay in yuan, and then use the yuan to pay for Chinese supplies. In such case, it is like using stakes in Russian property/companies in exchange for Chinese relief.
6/6 In any of the scenarios, it won't advance yuan's international use, which requires two countries not involving China settle their transaction in yuan.
Again, Russian export to China (mostly energy) has been de-dollarized, by shifting to the euro and little else up to the war.
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