China-Russia Bilateral Swap Agreements. Reasons And Consequences Of Gas Contract Between Russia And China On Example Of Gazprom Company

The aim of this paper is to analyze the reasons for signing Bilateral Swap Agreements (BSA) between China and other countries. Among the motifs for this, kind of agreements are size of the country, geographic position of the country, political and economic reasons. China seems to have enough experience in signing BSA. Thus, there have been some important agreements signed between China and ASEAN countries, South Korea and Japan. Only starting from 2008 China started signing BSA as a part of its aim to internationalize RMB. The first one was signed with South Korea in 2008; the amount of transaction was RMB 200 billion with the maturity of 3 years. Later, in 2011 the amount was doubled up to RMB 400 billion. The latest BSW signed by China and denominated in RMB is the agreement with Russian Federation in 2014 with the amount of RMB 150 billion. The agreement is valid for 3 years and can be extended by mutual consent. The bilateral swap agreement between Russia and China will enhance the domestic trade in RMB and RUB and will encourage Chinese and Russian banks to develop the financial infrastructure.