Japan and China reached the agreement on the use of national currencies

26.12.2011 25 December 2011 during the official meeting in Beijing Japan and China agreed to use national currencies instead of U.S. dollars in transactions between the companies of these jurisdictions. Such an agreement was reached between the countries due to the ongoing economic crisis that have already had global scales.

It is worth noting that the U.S. dollar and the euro are gradually losing their positions in the relevant market. Experts claim that the use of national currencies in transactions between entities of Japan and China will have a beneficial effect on the economic development of both countries.

During the discussion the issue of buying the Chinese government bonds by Japan was solved in the framework of bilateral economic cooperation. Let’s recall that China has also recently acquired a package of Japanese government bonds.

Expert’s opinion

“Many states tried to refuse using U.S. dollar as the world currency. All we remember what was in the end for Iraq and Libya. Even light-variant: settlements in euro were stopped at the root. Now China and Japan started this refusal.

They started the process very carefully and wisely. Both the countries are consumers of oil and gas. On this background the first settlements are in the sphere of settlements not for energy carriers but financial assets. And this market has been already diversified from the point of various currencies movement. (Let’s agree that if there is only U.S. dollar at Forex, the currency market won’t exist!) But down and Out matter is the beginning!

If this experiment brings good results and is developed by other countries maybe Russia and Ukraine will make transactions in rubles not in dollars for gas. Financial flow will be transparent as the child’s tear and the idea to withdraw it to Switzerland won’t appear. The issue with “offshores” will be solved at the basic level – the bright and pure economics!”

On the basis: www.newsru.com

Lomakin Yaroslav ( the managing partner of international consulting “Honest&Bright”)