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China slams US policy on North Korea; calls it “an abysmal failure”

During tense call between US President Donald Trump and Chinese President Xi Jinping China rejects US demands for oil embargo on North Korea

Alexander Mercouris

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US President Donald Trump and Chinese President Xi Jinping spoke to each other over the telephone on Wednesday 29th November 2017 following North Korea’s ICBM test.

China’s official news agency Xinhua has provided an account of the call, which reads as follows:

Chinese President Xi Jinping told his U.S. counterpart, Donald Trump, in a telephone conversation late Wednesday that denuclearizing the Korean Peninsula, maintaining international nuclear-nonproliferation regime, and preserving peace and stability in Northeast Asia are China’s unswerving goal.

He said China would like to keep up communications with the United States and all other related parties, and jointly push the nuclear issue towards the direction of peaceful settlement via dialogues and negotiations.

In response, Trump said the United States has serious concerns over the launch of a ballistic missile by the Democratic People’s Republic of Korea (DPRK).

The DPRK’s Korean Central Television reported that the country successfully test-fired a newly developed Intercontinental Ballistic Missile early Wednesday morning, a move that has drawn condemnation from the international community.

Pyongyang said “The development and advancement of the strategic weapon of DPRK are to defend the sovereignty and territorial integrity of the country from the U.S. imperialists’ nuclear blackmail policy and nuclear threat, and to ensure the peaceful life of the people.”

It is the first launch since Sept. 15, when the DPRK fired a ballistic missile over northern Japan into the Pacific Ocean.

Trump said Washington highly values China’s important role in solving the nuclear issue, and is willing to enhance communications and coordinations with China in search for solutions to the issue.

Also in their phone talks, the Chinese leader said that during Trump’s visit to China earlier this month the two heads of state have exchanged in-depth views on key issues of common concerns and reached important consensuses on multiple fronts, which bears important significance for maintaining sound and stable bilateral ties.

Xi called on the two sides to carry out these consensuses, make good plans for high-level bilateral exchanges, as well as at other levels, ensure the second round talks under all four high-level China-U.S. dialogue mechanisms a success, and implement cooperation agreements and projects between the two countries.

He also urged the two sides to maintain close communications and coordination on important international and regional affairs.

To help soothe the Korean Peninsula situation, China has proposed a dual-track approach, seeking to advance denuclearization and establish a peace mechanism in parallel. Beijing, in its “suspension for suspension” initiative, calls on Pyongyang to pause its missile and nuclear activities, and calls on Washington to put its joint military drills with South Korea on hold.

In response to the DPRK’s missile launch, the United Nations Security Council will hold an urgent meeting on Wednesday afternoon.

Since November last year, the Security Council has imposed export bans on coal, iron, lead, textiles and seafood, restricted joint ventures and blacklisted a number of DPRK’s entities in response to the country’s missile and nuclear tests.

It has also banned the hiring of DPRK’s guest workers and capped oil exports.

Under UN resolutions, DPRK is barred from developing missiles and a nuclear weapons capability, but Pyongyang argues that the arsenal is needed for self-defense against the “hostile” United States.

This official summary of the telephone conversation is a classic example of how China officially reports conversations by its President.  As such it requires careful reading to get a proper sense of what actually happened.

Firstly, the Xinhua report makes no reference to the longstanding US demand – repeated by Nikki Haley to the UN Security Council on Wednesday – that China impose an oil embargo on North Korea.

As it is inconceivable that President Trump did not bring up the subject of the oil embargo during the call, that can only mean that President Xi Jinping rejected it.

The Xinhua report suggests that in response to Trump’s demand for an oil embargo Xi Jinping reminded Trump of the extensive sanctions the UN Security Council has already imposed with China’s agreement on North Korea.  Note the careful way Xinhua lists them

Since November last year, the Security Council has imposed export bans on coal, iron, lead, textiles and seafood, restricted joint ventures and blacklisted a number of DPRK’s entities in response to the country’s missile and nuclear tests.

It has also banned the hiring of DPRK’s guest workers and capped oil exports.

The Xinhua report also suggests that Xi Jinping reminded Donald Trump of North Korea’s security concerns – concerns which China recognises as fully legitimate (see below) – whilst reiterating to Trump that the North Korean ballistic missile and nuclear weapons programme is clearly – as North Korea says – defensive.  Note how carefully Xinhua reports North Korea’s statement following the ICBM test that North Korea’s ballistic missile and nuclear weapons test is intended purely for self-defence

Pyongyang said “The development and advancement of the strategic weapon of DPRK are to defend the sovereignty and territorial integrity of the country from the U.S. imperialists’ nuclear blackmail policy and nuclear threat, and to ensure the peaceful life of the people.”….

The key point however about the Xinhua report is that it strongly implies that Trump threatened Xi Jinping with unilateral sanctions against Chinese companies if China did not comply with US demands for an oil embargo on North Korea.

The Xinhua report also says that Xi Jinping reminded Trump of the agreements for cooperation between the US and China which were reached during Trump’s visit to Beijing just a few weeks ago.  It seems that Xi Jinping pointedly reminded Trump that his threats of unilateral sanctions against Chinese companies were in total contradiction to these agreements

Also in their phone talks, the Chinese leader said that during Trump’s visit to China earlier this month the two heads of state have exchanged in-depth views on key issues of common concerns and reached important consensuses on multiple fronts, which bears important significance for maintaining sound and stable bilateral ties.

Xi called on the two sides to carry out these consensuses, make good plans for high-level bilateral exchanges, as well as at other levels, ensure the second round talks under all four high-level China-U.S. dialogue mechanisms a success, and implement cooperation agreements and projects between the two countries.

Lastly, it is clear from the Xinhua report that Xi Jinping warned Trump against unilateral US actions – whether against Chinese companies or against North Korea – reminded Trump of China’s proposal for a double-freeze (a halt to North Korea’s ballistic missile and nuclear tests in return for a halt to US military exercises and military deployments in and around the Korean Peninsula) and warned Trump that any and all steps taken by the US to resolve the North Korean issue should be agreed in advance with China.

Chinese President Xi Jinping told his U.S. counterpart, Donald Trump, in a telephone conversation late Wednesday that denuclearizing the Korean Peninsula, maintaining international nuclear-nonproliferation regime, and preserving peace and stability in Northeast Asia are China’s unswerving goal.

He said China would like to keep up communications with the United States and all other related parties, and jointly push the nuclear issue towards the direction of peaceful settlement via dialogues and negotiations……

He also urged the two sides to maintain close communications and coordination on important international and regional affairs.

To help soothe the Korean Peninsula situation, China has proposed a dual-track approach, seeking to advance denuclearization and establish a peace mechanism in parallel. Beijing, in its “suspension for suspension” initiative, calls on Pyongyang to pause its missile and nuclear activities, and calls on Washington to put its joint military drills with South Korea on hold.

That this was a tense and difficult conversation, with Xi Jinping rejecting Donald Trump’s demand for an oil embargo on North Korea and Donald Trump in response threatening Xi Jinping with US sanctions against Chinese companies, is all but confirmed by an uncharacteristically furious editorial which was published shortly after by China’s semi-official English language newspaper Global Times.

This editorial lays the entire blame for the North Korean ballistic missile and nuclear weapons programme and for the whole crisis in the Korean Peninsula squarely on US intransigence and short-sightedness

Over the years Washington has repeatedly issued statements on how they will not hesitate to deploy measures necessary to end North Korea’s nuclear ambitions. Pyongyang’s contrarian responses have only accelerated their progress as achievements have been made along the way. Overall, North Korea’s progress has superseded Washington expectations.

It must be acknowledged that US foreign policy on North Korea has been nothing but an abysmal failure. When Washington first took the initiative to negotiate, they ignored Pyongyang security demands, essentially blowing an opportunity urging them to discontinue their nuclear weapons program. And right now, the Trump administration actually believes it can influence Pyongyang’s weapons program by applying greater pressure on the country. And as if that wasn’t enough, Washington is counting on China to support a new round of Trump administration pressure tactics.

(bold italics added)

These words essentially confirm that Donald Trump demanded from Xi Jinping that China impose an oil embargo on North Korea and threatened Xi Jinping with unilateral US sanctions against Chinese companies unless it did so.

As to that demand – and the threat which came with it – Global Times confirms that Xi Jinping rejected it

Washington has placed China in a precarious situation by asking for more than what was originally expected by the UN Security Council regarding the previous round of North Korea sanctions. China has always carried out UN Security measures, however, it will refuse extra responsibilities stemming from both sides.

It is time the US realized that increasing and tightening sanctions already in place will not have the desired effect. Since yesterday, Pyongyang has never been this confident. Condemnations from the UN Security Council and the new sanctions that may follow will solve nothing.

(bold italics added)

Interestingly, and in a sign of the close coordination between Beijing and Moscow on the North Korean issue, Global Times also repeats a recent Russian claim that the US threw away an opportunity to negotiate with North Korea during the two months prior to the ICBM launch when there were no North Korean ballistic missile or nuclear tests

During the previous two months, North Korea’s nuclear ambitions were practically dormant. The reason for such quiet might have been related to the necessary preparation for their recent launch. Or it could have been a message intended for the US designed to ease tension between the two countries.

Unfortunately, Washington chose not to adjust its course. On November 20, Trump redesignated North Korea as a state-sponsor of terror and imposed new sanctions on the country. If the only thing the US achieved was to ignite the wrath of Kim Jong-un.

Both sides need to see each other clearly. Washington should have learned by now that relying solely on pressure will not subdue North Korea.  Also, the US might want to take North Korea’s national security requests seriously from here on out.

(bold italics added)

These identical comments from Beijing and Moscow suggest that the Chinese and the Russians know a great deal more than they are saying.

I suspect that over the course of the recent talks in Moscow the North Koreans told the Russians that preparations for the next North Korean ICBM test were two months away, and that if the US was genuinely interested in compromise it should use this period to signal clearly that it was looking for a compromise.

If the North Koreans did say this to the Russians then the Russians would have passed it on to the Chinese and to the US.  However Washington ignored it, instead increasing the pressure on North Korea by declaring it a ‘terrorist state’ and imposing more sanctions on it, with the results that we now see.

As to what those results are, Global Times spells them out

Foreign experts analyzed data from the Hwasong-15 and found that a standard launch could see the missile travel 13,000 km (8,000 miles). This means North Korea now has a missile that can clear the entire US (Pyongyang to New York City is 6,672 miles).

The impression made by the Hwasong-15 test has been a confidence booster for Pyongyang. They have finally proven to themselves and to the world they now have the weapons capability to strike anywhere in the US.  Initial reports from the ICBM launch sent shockwaves through DC and US society….

Advances in nuclear weapons will never subside. Initially, the most important component of an intercontinental ballistic missile was how far it could travel. Now, the next stage will require advanced development in areas pertaining to mobility and protection.

In other words, by throwing away the opportunity to negotiate a compromise during the two months when the North Korean ballistic missile and nuclear weapons testing programme was dormant, the US has put itself in a weaker position and North Korea in a stronger position than they were in before.

That the conversation between Donald Trump and Xi Jinping was tense and fraught, and is the cause of great anger in Beijing, is further indicated by certain comments coming out of Moscow, which is clearly in constant touch with Beijing on this issue.  Here is how the official Russian news agency TASS reports these comments by Russian Foreign Minister Lavrov

…..”Washington’s recent steps seem to be deliberately aimed at provoking Pyongyang to take some tough actions,” [Lavrov] noted. The US should openly say if its provocative actions are aimed at destroying North Korea, he said.

He pointed out that Washington “announced that large-scale unscheduled drills would held in December.” “It seems, they have done everything on purpose, to make [North Korean leader] Kim Jong-un lose control and make another desperate move,” he said. “The Americans need to explain to us all what they are actually up to. If they seek a pretext to destroy North Korea, they should openly say so and the US leadership should confirm it. Then we would decide how to respond,” the Russian top diplomat added.

Russia is against US proposals for an economic blockade of North Korea and believes the sanctions pressure has exhausted itself, he said.

“Our attitude (to the US proposals – TASS) is negative. We have said more than once that the sanctions pressure has in fact exhausted itself,” he said.

At the same time, Lavrov confirmed that Moscow did not support Washington’s initiatives concerning the economic blockade of North Korea and believed that the potential of sanctions had been exhausted. “Our attitude [towards the US initiatives – TASS] is negative. We have stressed many times that the potential of sanctions has actually been exhausted,” Lavrov said.

He pointed out that “all the resolutions imposing sanctions also demand that the political process and talks be resumed.” “But the US has been ignoring this demand. I think it is a huge mistake,” the Russian top diplomat noted.

(bold italics added)

These comments of Lavrov’s – especially the highlighted words – are very interesting, not just because they place the blame on the US for the whole crisis and because they clearly rule out an oil embargo, but because they hint that the US’s real intention towards North Korea is not to bring its ballistic missile and nuclear weapons programme to an end but rather to achieve regime change in Pyongyang.

Back in August an editorial in Global Times warned that if the US attacked North Korea China would act by military means if necessary to defend North Korea.  Lavrov’s words about Russia effectively associate Russia with this Chinese warning.

The route to compromise over the North Korean ballistic missile and nuclear weapons programme is not closed.

Negotiations continue.  There was a big Russian delegation in Pyongyang at the time of the ICBM launch, undoubtedly as a follow up to the earlier meetings between Russian and North Korean diplomats in Moscow.

China also continues to pursue diplomacy with South Korea, and there is now no doubt that the Chinese and the Russians are working together.

However the latest words from Beijing and Moscow show that the Chinese and the Russians no longer see the primary obstacle to a compromise in Pyongyang.  Rather they see it in Washington, and they are adjusting their diplomacy accordingly.

What that means is that the US is becoming even more sidelined as the Chinese and the Russians search for a diplomatic solution by direct diplomacy with the two Koreas, which no longer involves the US.

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Russian Il-20 downed by Syrian missile. Russia blames Israel. Israel blames Syria (Video)

The Duran – News in Review – Episode 110.

Alex Christoforou

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The unthinkable has happened in Syria.

The world now teeters on the brink of all out war in Syria as a Russian Il-20 was downed by Syrian missile after Israeli F-16s used it as cover during attack, according to statements made by the Russian Ministry of Defense.

President Vladimir Putin, answering a reporter’s question during a press conference with Hungarian PM Viktor Orban, said the downing of the Russian Il-20 plane looks like “a chain of tragic circumstances.” 

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the tripwire triggered that has the potential to tip the fragile balance in Syria towards conflict between Russia, Iran and Israel.

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The Russian military says an Israeli raid on Syria triggered a chain of events that led to its Il-20 plane being shot down by a Syrian S-200 surface-to-air missile. Moscow reserves the right to respond accordingly.

Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov said…

“Israel did not warn the command of the Russian troops in Syria about the planned operation. We received a notification via a hotline less than a minute before the strike, which did not allow the Russian aircraft to be directed to a safe zone.”

The statement by the Russian Defense Ministry said that four Israeli F-16 fighter jets attacked targets in Syria’s Latakia after approaching from the Mediterranean.

The Israeli warplanes approached at a low altitude and “created a dangerous situation for other aircraft and vessels in the region.”

The statement further said that 15 Russian military service members have died as a result…

“The Israeli pilots used the Russian plane as cover and set it up to be targeted by the Syrian air defense forces. As a consequence, the Il-20, which has radar cross-section much larger than the F-16, was shot down by an S-200 system missile.”

According to reports from RT, the Russian military said that the French Navy’s frigate ‘Auvergne,’ as well as a Russian Il-20 plane were in the area during the Israeli operation.

Map of the incident on September 17 in Syria provided by the Russian defense ministry.

The Russian ministry said the Israelis must have known that the Russian plane was present in the area, but this did not stop them from executing “the provocation.” Israel also failed to warn Russia about the planned operation in advance. The warning came just a minute before the attack started, which “did not leave time to move the Russian plane to a safe area,”the statement said.

The statement gives a larger death toll than earlier reports by the Russian military, which said there were 14 crew members on board the missing Il-20. It said a search and rescue operation for the shot-down plane is underway.

A later update said debris from the downed plane was found some 27km off the Latakia coast. The search party collected some body parts, personal possessions of the crew, and fragments of the plane.

Meanwhile Israel has come out to blame the Syrian government for the downing of the military plane, according to an IDF statement.

Israel said that it “expresses sorrow for the death of the aircrew members” of the Russian plane. However, it stated that the government of Bashar Assad “whose military shot down the Russian plane,” is “fully responsible” for the incident.

Israel further blamed Iran and Hezbollah for the incident.

The Israel Defense Forces (IDF) explained that its jets were targeting a Syrian facility “from which systems to manufacture accurate and lethal weapons were about to be transferred on behalf of Iran to Hezbollah in Lebanon.”

Israel claimed that the weapons were “meant to attack Israel.”

Via RT

The IDF assumed that the Syrian anti-air batteries “fired indiscriminately” and didn’t “bother to ensure that no Russian planes were in the air.” The Israelis said that when the Syrian military launched the missiles which hit the Russian plane, its own jets were already within Israeli airspace. “During the strike against the target in Latakia, the Russian plane that was then hit was not within the area of the operation.”

According to the Israeli military, both IDF and Russia have “a deconfliction system,” which was agreed upon by the leadership of both states, and “has proven itself many times over recent years.” The system was in use when the incident happened, the IDF stated. The IDF promised to share “all the relevant information” with Russia “to review the incident and to confirm the facts in this inquiry.”

The military presented a four-point initial inquiry into events in Latakia. It insisted that “extensive and inaccurate” Syrian anti-aircraft fire caused the Russian jet “to be hit and downed.”

The Russian Il-20 aircraft, with 15 crew on board, went off radar during an attack by four Israeli jets on Syria’s Latakia province late Monday. Later on Tuesday the Russian Defense Ministry said that an Israeli raid on Syria triggered a chain of events that led to its plane being shot down by a Syrian S-200 surface-to-air missile.

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Trump Orders Immediate Release Of All Text Messages, Carter Page FISA Application From Russia Investigation

Trump has ordered the DOJ to release all text messages related to the Russia investigation with no redactions.

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Via Zerohedge

President Trump has ordered the Department of Justice to release all text messages related to the Russia investigation with no redactions, of former FBI Director James Comey, his deputy Andrew McCabe, now-fired special agent Peter Strzok, former FBI attorney Lisa Page and twice-demoted DOJ official Bruce Ohr.

Also released will be specific pages from the FBI’s FISA surveillance warrant application on former Trump campaign aide Carter Page, as well as interviews with Ohr.

The statement reads in full:

“At the request of a number of committees of Congress, and for reasons of transparency, the President has directed the Office of the Director of National Intelligence and the Department of Justice (including the FBI) to provide for the immediate declassification of the following materials: (1) pages 10-12 and 17-34 of the June 2017 application to the FISA court in the matter of Carter W. Page; (2) all FBI reports of interviews with Bruce G. Ohr prepared in connection with the Russia investigation; and (3) all FBI reports of interviews prepared in connection with all Carter Page FISA applications.

In addition, President Donald J. Trump has directed the Department of Justice (including the FBI) to publicly release all text messages relating to the Russia investigation, without redaction, of James Comey, Andrew McCabe, Peter Strzok, Lisa Page, and Bruce Ohr

***

As we reported last Monday, Trump had been expected to release the documents any time – with specific attention to the Page documents and the “investigative activities of Justice Department lawyer Bruce Ohr” – who was demoted twice for lying about his extensive relationship  with Christopher Steele – the former MI6 spy who assembled the sham “Steele Dossier” used by the FBI in a FISA surveillance application to spy on Page.

Republicans on the House Intelligence and Judiciary committees believe the declassification will permanently taint the Trump-Russia investigation by showing the investigation was illegitimate to begin with. Trump has been hammering the same theme for months.

  • They allege that Bruce Ohr played an improper intermediary role between the Justice Department, British spy Christopher Steele and Fusion GPS — the opposition research firm that produced the Trump-Russia dossier, funded by Democrats. (Ohr’s wife, Nellie, worked for Fusion GPS on Russia-related matters during the presidential election — a fact that Ohr did not disclose on federal forms.)
  • And they further allege that the Obama administration improperly spied on Carter Page — all to take down Trump. –Axios

Ohr, meanwhile, met with Russian billionaire Oleg Deripaska in 2015 to discuss helping the FBI with organized crime investigations, according to The Hill‘s John Solomon. The meeting with the Putin ally was facilitated by Steele.

Last month Trump called Ohr a disgrace, while also tweeting: “Will Bruce Ohr, whose family received big money for helping to create the phony, dirty and discredited Dossier, ever be fired from the Jeff Sessions  “Justice” Department? A total joke!”

Trump’s threat came one day after two tweets about Ohr, noting a connection to former FBI agent Peter Strzok, as well as a text sent by Ohr after former FBI Director James Comey was fired in which Ohr says “afraid they will be exposed.”

According to emails turned over to Congressional investigators in August, Christopher Steele was much closer to Bruce Ohr and his wife Nellie than previously disclosed.

Steele and the Ohrs would have breakfast together on July 30, 2016 at the Mayflower Hotel in downtown Washington D.C., days after Steele turned in installments of his infamous “dossier” on July 19 and 26. The breakfast also occurred one day before the FBI formally launched operation “Crossfire Hurricane,” the agency’s counterintelligence operation into the Trump campaign.

“Great to see you and Nellie this morning Bruce,” Steele wrote shortly following their breakfast meeting. “Let’s keep in touch on the substantive issues/s (sic). Glenn is happy to speak to you on this if it would help.”

“After two years of investigations and accusations from both sides of the aisle about what documents indicate, it is past time for documents to be declassified and let the American people decide for themselves if DoJ and FBI acted properly,” Freedom Caucus chairman Mark Meadows told Axios earlier Sunday.

In early August, journalist Paul Sperry tweeted that Trump may use his presidential authority to declassify “20 redacted pages of a June, 2017 FISA renewal, “and possibly” 63 pages of emails and notes between “Ohr & Steele,” and FD-302 summaries of 12 interviews.”

President Trump threatened to declassify documents two weeks ago – one day after the New York Times allegedly published an anonymous Op-Ed claiming to be from a White House official claiming to be part of an unelected “resistance” cabal within the Trump administration.

“The Deep State and the Left, and their vehicle, the Fake News Media, are going Crazy – & they don’t know what to do,” Trump tweeted earlier this month, adding: “The Economy is booming like never before, Jobs are at Historic Highs, soon TWO Supreme Court Justices & maybe Declassification to find Additional Corruption. Wow!”

Trump’s threat comes as calls by frustrated GOP legislators to release the documents have hit a fevered pitch. Spearheading the effort are Republican Reps. Meadows, Jim Jordan, Matt Gaetz and Lee Zeldin – who have repeatedly asked Trump to declassify more of the heavily redacted FISA surveillance warrant on former Trump campaign aide Carter Page in late 2016.

In June, Republicans on the House Intelligence Committee asked President Trump to declassify key sections of Carter Page’s FISA warrant application, according to a letter obtained by Fox News.

Carter Page, the DOJ/FBI’s person of interest, weighed in on the matter in late August, tweeting: “The Corrupt DOJ, co-conspirators in the DNC and their high-priced consultants correctly believed they had American democracy and the FISA Court over a barrel in 2016.”

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De-Dollarization Tops Agenda at Russia’s Eastern Economic Forum

The Eastern Economic Forum (EEF) was held in Vladivostok on Sept.11-13. Founded in 2015, the event has become a platform for planning and launching projects to strengthen business ties in the Asia-Pacific region.

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Via Strategic Culture

This year, the EEF brought together delegations from over 60 countries to discuss the topic “The Far East: Expanding the Range of Possibilities”. A total of 100 business events involving over 6,000 participants were held during the three days.

1,357 media personnel worked to cover the forum. Last year, the number of participants was 5,000 with 1,000 media persons involved in reporting and broadcasting. The EEF-18 gathered 340 foreign and 383 Russian CEOs. Nearly 80 start-ups from across South-East Asia joined the meeting.

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This year, a total of 175 agreements worth of 2.9 trillion rubles (some $4.3 billion) were signed. For comparison, the sum was 2.5 trillion rubles (roughly $3.7 billion) in 2017.

They included the development of the Baimsky ore deposits in Chukotka, the construction of a terminal for Novatek LNG at Bechevinskaya Bay in Kamchatka and the investment of Asian countries in Russia’s agricultural projects in the Far East.

Russian Direct Investment Fund (RDIF), Mail.Ru Group, Megafon and Chinese Alibaba inked an agreement on establishing AliExpress trade joint venture. Rosneft and Chinese CNPC signed an oil exploration agreement.

The Chinese delegation was the largest (1,096 people), followed by the Japanese (570 members). The list of guests included the president of Mongolia and prime ministers of Japan and South Korea.

It was also the first time Chinese President Xi Jinping attended the event to meet his Russian counterpart. The issue of de-dollarization topped the agenda. Russia and China reaffirmed their interest in expanding the use of national currencies in bilateral deals.

During the forum, Kirill Dmitriev, the head of RDIF, said the fund intends to use only national currencies in its transactions with China starting from 2019. It will cooperate with the China Development Bank.

This “yuanification” is making visible progress with Shanghai crude futures increasing their share of oil markets up to 14 percent or even more. China has signed agreements with Canada and Qatar on national currencies exchange.

READ MORE: Eastern Economic Forum opens new chapter in US-Russia dialogue

De-dollarization is a trend that is picking up momentum across the world. A growing number of countries are interested in replacing the dollar. Russia is leading the race to protect itself from fluctuations, storms and US-waged trade wars and sanctions.

Moscow backs non-dollar trade with Ankara amid the ongoing lira crisis. Turkey is switching from the dollar to settlements in national currencies, including its trade with China and other countries. Ditching the US dollar is the issue topping the BRICS agenda. In April, Iran transferred all international payments to the euro.

The voices calling for de-dollarization are getting louder among America’s closest European allies. In August, German Foreign Minister Heiko Maas called for the creation of a new payments system independent of the US.

According to him, Europe should not allow the United States to act “over our heads and at our expense.” The official wants to strengthen European autonomy by establishing independent payment channels, creating a European Monetary Fund and building up an independent SWIFT system.

Presenting his annual program, European Commission President Jean-Claude Juncker called on Sept. 12 for the European Union to promote the euro as a global currency to challenge the dollar.

According to him, “We must do more to allow our single currency to play its full role on the international scene.” Mr. Juncker believes “it is absurd that Europe pays for 80 percent of its energy import bill – worth 300 billion euros a year – in US dollars when only roughly 2 percent of our energy imports come from the United States.” He wants the raft of proposals made in his state of the union address to start being implemented before the European Parliament elections in May.

70% of all world trade transactions account for the dollar, while 20% are  settled in the euro, and the rest falls on the yuan and other Asian currencies. The dollar value is high to make the prices of consumer goods in the US artificially low. The demand for dollars allows refinancing the huge debt at low interest rates. The US policy of trade wars and sanctions has triggered the global process of de-dollarization.

Using punitive measures as a foreign policy tool is like shooting oneself in the foot. It prompts a backlash to undermine the dollar’s status as the world reserve currency – the basis of the US economic might. The aggressive policy undermines the US world standing to make it weaker, not stronger.

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