Chinese Yuan Surges as Russia’s Main Currency for Foreign Trade
The Chinese yuan is becoming Russia's main currency in foreign trade, allowing the Kremlin to circumvent Western sanctions and finance critical imports. In his article, Volodymyr Kuznetsov analyzes how the yuan and the UAE dirham have become key instruments for supporting Russia's budget and military spending, as well as what measures the West can take to block these alternative currency channels.
Over the past few years, the yuan has become a key instrument of Russia's foreign trade and finance. In 2021, its share in the country's currency transactions was less than 1%, but by mid-2025, it exceeded 40% in foreign trade and more than 50% in interbank transactions.
With the yuan, Moscow finances critical imports, from electronics and microchips to machinery and equipment for the military-industrial complex. Transactions that are impossible in dollars or euros due to the risk of blocking are carried out through Chinese banks.
In addition, the yuan is used as a reserve currency: the Central Bank of Russia has accumulated it in its international reserves, as most assets in dollars and euros are frozen. Thus, Beijing has become not only a trading partner but also a financial donor to Russian stability.
This situation demonstrates the vulnerabilities of the Western sanctions system. It did not take into account Russia's willingness to quickly change its currency policy and abandon the dollar and euro.
The West also lacks sufficient influence over the financial systems of China and the UAE, which have not joined the sanctions, and the absence of secondary sanctions allows numerous intermediaries to operate on the edge of legality.
China is a telling case: mid-range banks openly conduct transactions with Russia in yuan, formally complying with international rules. Similar schemes operate in Dubai, where local banks serve Russian companies using the dirham's fixed peg to the dollar.
Read more on The Gaze: Currency Operations for Sanctions Evasion: How the Yuan and Dirham Save the Kremlin and Why This Weakness Can Be Blocked