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Chinese President Xi Jinping's visit to Moscow for in-depth talks with Vladimir Putin has provoked angry responses from Washington and Europe. Hong Kong-based political and financial analyst Angelo Giuliano explains why the summit can be seen as a threat to Western hegemony.
Closer economic ties Russia and China could spell the end of the dollar's primacy in trade and even US imperialist hegemony.
Chinese President Xi Jinping arrived in Moscow on Monday for three days of talks with his Russian counterpart Vladimir Putin.
The meeting had already provoked a flurry of angry statements and political diversions, including the International Criminal Court's attempt to accuse Putin of child abduction and Washington's rejection of Beijing's blueprint for peace in Ukraine.
"China and Russia are very complementary," Giuliano explained. "Russia has the natural resources that China is lacking and China has a very large industrial/manufacturing base and financial strength."
Crucially, China can help Russia bypass sanctions imposed by Western countries following the launch of the military operation in Ukraine.
Moreover, "Both countries are preparing for a possible wider confrontation with the collective West," Giuliano stressed. "Both countries are already in a de-facto alliance."
The agenda for the summit is likely to include building a new international money transfer mechanism, independent from the Western SWIFT system that Russia is now locked out of. The analyst said that could eventually be based on a new currency controlled the BRICS development bank, based on a basket of the member states' currencies and backed by gold reserves.
That could herald the end of US dominance of the financial system and the privileged position of its currency in international trade.
"The end of the dollar hegemony would initiate the downfall of the US, the end of the exorbitant privilege to print the global currency, to constantly finance trade deficit by issuing US debt which not meant to be repaid, a de-facto 'Ponzi scheme'," Giuliano said. "This would mean the end of lavish US lifestyle at the expanse of the Global South."
A new international financial system, in competition with the US-based 'Bretton-Woods' institutions like the World Bank and International Monetary Fund (IMF), could be opened up to any country which wants to join, the expert said.
Its selling point would be "a much more democratic system without the veto vote applied in the US controlled World Bank and IMF," Giuliano said. "Many countries have shown interest and the shift could be gradual."
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