Editor’s Note: Andrew Korybko is an American political analyst based in Moscow. The article reflects the views of the author and not necessarily those of CGTN.

The unprecedented US-led Western sanctions against Russia imposed in response to its military action in Ukraine have completely upended the legitimate rules-based international order and the previously globalized economy. More immediately, they have made it extremely difficult for Russia to continue trading with its partners due to the dollar’s role as the world’s reserve currency and the specter of so-called secondary sanctions against those who use it to continue trading. with this country.

Russia, however, is a major economy that cannot be isolated. Not only is it an energy superpower, but it is also a commodities superpower, as evidenced by the important role it plays in the global agriculture and fertilizer industries. These are indispensable goods from which the rest of the world – especially the countries of the South – urgently need reliable imports in order to maintain and possibly improve the standard of living of their people. This is why the sanctions have caused so much uncertainty lately.

It was only a matter of time before a financially viable workaround was established to restore trade between Russia and sovereign states that refused to comply with the illegal sanctions imposed by the United States in outside the UN Security Council. That moment has just arrived, as evidenced by a Reuters report on Wednesday titled “India’s Leading EXCLUSIVE Cement Company Pays Russian Coal in Chinese Yuan.”

The outlet cited an Indian customs document claiming to show that “India’s largest cement producer, UltraTech Cement, is importing a shipment of Russian coal and paying in Chinese yuan.” He also attributed a claim to two unnamed sources familiar with the matter that “other companies have also placed orders for Russian coal using yuan payments” through the Dubai-based unit of Russian producer SUEK. . These revelations carry with them an immense financial and strategic significance which will now be analyzed.

First, Russia and India see each other as special and privileged strategic partners. Despite a close US-led partnership with the West on the G7, Quad and other initiatives, Delhi has defied their pressure to sanction Moscow, even going so far as to increase cut-price oil imports 50-fold. over the past three months. India’s complementary policies of non-alignment, principled neutrality and persistent pursuit of strategic autonomy are the reasons why it has done so.

It was previously reported that plans were underway to establish a rouble-rupee mechanism, and while it is unclear if it has already gone live, the report quoted by Reuters suggests that India has already started to use the yuan to facilitate at least some of its trade with Russia. This is an important step in itself, as it shows that China-India relations are back on track.

After all, India wouldn’t rely on the yuan to facilitate at least some of its trade with Russia if it didn’t when it is already considering establishing a ruble-rupee mechanism. This brings the analysis to the second meaning of the Reuters report, namely that the BRICS – whose last virtual summit was hosted by China last week – function as the engine of financial multipolarity by paving the way for other southern states. follow.

Even though Indian Prime Minister Narendra Modi has just taken part in this week’s G7 summit in southern Germany, he and the rest of his country’s leadership are pragmatic enough not to put all their economic eggs in one. basket. This is why India is simultaneously expanding its relations with the US-led Western Golden Billion as well as with the BRICS-led Global South, the latter of which it is an integral part.

As for the third and most important point, there is no longer any doubt that the yuan is on the way to becoming the multipolar reserve currency. The dollar is no longer reliable after the United States and its allies seized about $300 billion of Russia’s foreign exchange reserves shortly after its military action in Ukraine began. Not only that, but continuing to use it to trade with Russia – especially for essential imports like agriculture, energy and fertilizers – carries the ever-looming threat of secondary sanctions.

China is a fair and neutral country that would never militarize its financial system, so everyone knows it can be trusted. The country has always been a reliable partner for anyone who wants to do business with it. Even India, despite its increasingly close relations with the West, knows this and that is why it is now using the yuan to facilitate trade with Russia in these new circumstances.

The general and irreversible trend is that anti-Russian sanctions from the US-led West are accelerating the decline of the dollar as the world’s reserve currency by giving the yuan an unexpected boost among multipolar countries. Over time, the dollar will be used less and less, while the yuan will be used more, especially for trade between countries in the South. This, in turn, will accelerate the decline of US unipolar hegemony and facilitate the rise of the multipolar world order faster than ever.

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