[Yuan banknotes are seen in this illustrative photograph taken in Beijing July 26, 2010. (File photo by=REUTERS/Jason Lee)]

TAIPEI: The war in Ukraine and Russia's effective exclusion from the global currency system could be an opportunity for China to raise the profile of its currency in a challenge to the US dollar, a senior Taiwanese security official said on Monday (Mar 28), Reuters reported.
 
Russia has said it is counting on China to help it withstand the blow to its economy from Western sanctions and will use the Chinese yuan from its foreign exchange reserves after the sanctions blocked its access to its US dollars and euros reserves. Taking questions in parliament, National Security Bureau Director-General Chen Ming-tong said China had always wanted a way to throw off the domination of the US dollar, and the war could boost the use of the yuan. Chen said the war could actually improve China-US relations if China chose to stand with the United States in the same way, it did after Sep 11, 2001, attacks that earned US goodwill.
 
Beijing has repeatedly voiced opposition to the sanctions on Russia and has insisted it will maintain normal economic and trade exchanges.  But behind the scenes, China is wary of its companies running afoul of sanctions and is pressing companies to tread carefully with investment in Russia, its second-largest oil supplier, and third-largest gas provider.