China and Russia Join Forces Against "Parasitic" U.S. Dollar

Posted by Brianna Panzica - Wednesday, October 12th, 2011

Russian Prime Minister Vladimir Putin is in Beijing this week working on Chinese relations in a series of meetings with Chinese premier Wen Jiabao.

The main focus of Tuesday’s meeting was the Russia-China Investment Fund – a joint fund that will draw investments from China, Russia, and outside investors.

According to the Financial Times, both China Investment Corp and Russian Direct Investment Fund will contribute $1 billion each to this joint fund.

The nations have also expressed the wish to raise another $2 billion from other Chinese investors, the article reports.

The Russian Direct Investment Fund (RDIF) will be primarily in charge of the fund, and because of this 70% of the investments will be made in Russia, Kazakhstan, and Belarus.

“All of the investments we make will be in companies or projects that benefit the Russian and Chinese economic relationship,” RDIF chief executive Kirill Dmitriev assured the Financial Times. Cooperation is the key.

But RDIF is new itself. Started in June, this marks its first financial commitment.

RDIF already has a plan to raise $50 billion in investments in the next five to seven years.

This also marks one of the first major collaborations between China and Russia, but it certainly won’t be the last.

“We have reached unprecedented levels of cooperation,” Vladimir Putin told the Financial Times.

The cooperation could, however, be in regards to a common enemy: the U.S.

Vladimir Putin has openly expressed distaste at the function of the U.S. dollar.

“The U.S. is not a parasite for the world economy, but the U.S. dollar’s monopoly is parasitic,” Time reported him saying to Xinhua after Tuesday’s meeting.

A common goal of breaking up this “monopoly” could lie behind the suddenly warm relations.

Before these meetings, Financial Times reports, China-Russia interactions consisted of a few real estate investments and China’s $100 million purchase of stake in Russia’s VTB Bank.

Now, however, the nations and their leaders are looking to iron out differences and team up even more.

The nations have also been working on negotiations over pipeline and gas sales, talks that have been ongoing for years. Little headway was made on Tuesday, but the leaders hope to get somewhere before Putin’s visit ends.

Officials also told Time that before the visit is over, at least $7 billion in deals will be reached.