The USA derives an immense economic and financial advantage through the US Dollar’s role as the world's primary reserve currency. China along with many other countries are acutely aware that the USA frequently uses that US Dollar pre-eminence, to impose unilateral economic, and financial sanctions on those countries that are reluctant to bend to the USA's wishes. Indeed, the use of unilateral economic sanctions by the USA has become an increasingly used weapon in recent years, which has caused a great deal of ill feeling in many parts of the world.
In 2001 China, along with Russia, established the SCO (The Shanghai Co-operation Organisation), which is a political, economic and military organisation that initially comprised of China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan, and Uzbekistan. In July 2015 the SCO decided to admit India and Pakistan as full SCO members. Observer states include Mongolia, Iran, Belarus and Afghanistan. This was an initial step in the Chinese long-term plan to counter balance the increasing US global hegemony.
A few years after the formation of the SCO, a loose association was formed between the BRICS (Brazil, Russia, India, China and South Africa), in which bilateral relations amongst the BRICS nations have mainly been conducted on the basis of non-interference, equality, and mutual benefit (win-win). It is estimated that the combined GDP of the BRICS should reach the US$50 trillion mark by 2020.
In 2007, the international financial system was overheating, and increasingly out of balance. That situation was highlighted by Putin's address at the 2007 SCO summit, in which he commented as follows:
"We now clearly see the defectiveness of the monopoly in world finance, and the policy of economic selfishness. To solve the current problem Russia will take part in changing the global financial structure so that it will be able to guarantee stability and prosperity in the world and to ensure progress.
The world is seeing the emergence of a qualitatively different geo-political situation, with the emergence of new centres of economic growth and political influence.
We will witness, and take part, in the transformation of the global and regional security, and development architectures adapted to the new realities of the 21st century, when stability and prosperity are becoming inseparable notions". Vladimir Putin
The 2008 crisis that shook the international financial system only intensified the Chinese and Russian efforts to construct the infrastructure necessary to support an alternative, and parallel international financial system, independent of the US Dollar.
In 2012, under US pressure, Iran was expelled from world's international transfer system (SWIFT), which had a profoundly adverse impact on Iran's economy. This US action only served to motivate the Chinese and Russians to develop, and introduce, their own international transfer system, independent of SWIFT.
In 2014 the US, UK and EU backed coup d'état in Ukraine, and the subsequent US driven international trade sanctions imposed upon Russia, had the unintended consequence of incentivising both Russia and China to become increasingly close in all fields of co-operation, as it was clearly recognised as being the only way that they could successfully resist, and push back the US global hegemony.
Russia, with its huge natural resources, and its increasingly modernised military machine, combined with China's enormous economy, financial muscle, huge population, rapidly growing modern military machine, and increasingly impressive IT expertise, make a the two nations a most formidable team! China has used Russia's partnership, support and resources, with Russia's blessing, in the development of their new international financial system.