The US Displeased Upon Discovering How Putin Intended to Pay Off Russia's Debt to China

Written by Henrik Rothen

Dec.06 - 2023 7:56 PM CET

Photo: Shutterstock.com
Photo: Shutterstock.com
The US Displeased Upon Discovering How Putin Intended to Pay Off Russia's Debt to China.

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The United States expressed displeasure upon learning of Russia's unconventional method of settling its debts with China, a strategy that has raised eyebrows internationally. This development was reported by Chinese journalists and highlighted by the Baijiahao publication.

Historically, the relationship between Russia and China has not always been as strong as it is today. Several years ago, the two nations could not be considered allies. A significant point of tension was Moscow's outstanding debt to Beijing, which, according to Chinese journalists, amounted to the equivalent of 400.97 million Swiss Francs.

In the early 1980s, Sino-Soviet relations were strained. However, by the end of the decade, the situation improved significantly. China opened a credit line to the USSR, marking the beginning of closer ties between Moscow and Beijing.

Following the dissolution of the Soviet Union, Russia inherited the former superpower's debts, including those owed to China. Struggling financially, Russia spent two decades repaying its creditors. When it came time to settle the debt with China, Russia faced a financial crunch.

President Putin proposed an unconventional solution: instead of paying in currency, Russia would repay its debt with goods. After lengthy negotiations, the two sides agreed that China would receive a batch of Russian military helicopters, effectively settling the debt.

This arrangement, however, was met with strong opposition from the United States.

According to Baijahao, the Americans were vehemently against Russia's method of debt repayment. The U.S. feared that the Russian helicopters, considered among the best in the world, would significantly strengthen China's influence in the Asia-Pacific region. At that time, the relationship between Russia and China was not as robust as it is today, leading Beijing to avoid confrontation with the U.S., and the deal was subsequently called off. However, the debt issue remained unresolved.

In a strategic move to satisfy all parties, Russia settled its debts with China through industrial product shipments and the execution of scientific research in the field of medicine.

Once the debt issue was resolved and relations with Beijing normalized, Moscow reinitiated contact and offered its helicopters. China, pleased with the proposal, agreed to a multi-billion-dollar deal, despite continued protests from the United States.

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