Despite the details for the deal being scarce, many analysts predict that the oil exports would mean Chinese yuan being exchanged directly, into the Russian ruble. Thus the two countries would bypass the U.S. dollar - the traditional currency used in oil trades and considered to be the international reserve currency of choice.
Medvedev promotes ruble
Meanwhile, VTB, Russia's second biggest bank, has signed a deal with Bank of China that includes an agreement to pay each other in domestic currencies. Added to this, Russian Prime Minister Dmitry Medvedev spoke on Russian TV over the weekend saying sanctions imposed on the country by the EU and U.S. would make Russia use the ruble for trade and would eventually turn it from a "convertible into a reserve currency."
With the two developing nations trading outside of the U.S. dollar, many questions are being raised about what this would do for the greenback and for the U.S. The dollar's status as the global reserve currency has allowed the U.S. to borrow large sums of money, effectively living beyond its means, because there is always a demand for its currency.
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According to Rickards, who has written extensively about the subject, the problem is that in complex systems - such as global financial markets - small trends can rapidly develop into catastrophic collapses.
"The larger problem is that the U.S. is taking the reserve currency role of the dollar for granted and risks jeopardizing confidence in it through (Federal Reserve) monetary policy and the Treasury's cheap dollar policy. Confidence in the dollar can persist for now and then be lost as quickly as happened in the late 1970s," he said.
China diversifies holdings
China has become the largest holder of U.S. debt. Its authorities hold around $3.8 trillion of reserves, the majority of which is denominated in U.S. dollars. However, they have expressed a desire to diversify away from the greenback, and have already pared back their U.S. Treasury holdings. Analysts believe the strength of the euro has been due to China buying the single currency and with the country rivaling India to be the biggest global buyer of gold, it appears this diversification could be well underway.
As China can't easily dump its Treasury holdings due to the market panic that it could cause, Rickards believes that it is creating a hedged position to preserve Chinese wealth.
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"As the U.S. devalues the dollar through inflation, China will lose wealth on the dollar position but will profit on the euros and gold and those profits will offset the losses. So, basically, China is constructing a massive hedge using gold," he said. If the dollar's role as the leading reserve currency is lost, he believes the replacement would come from among euros, gold or special drawing rights (SDRs) - a supplementary asset maintained by the International Monetary Fund.
Garrick Hileman, an economic historian at the London School of Economics believes that the Russia-China deal bolsters the yuan's international trade status and is a candidate for one day becoming a reserve currency. However, he cautions against any thoughts that the dollar's status is in jeopardy.
"Path dependency and other factors make reserve currencies difficult to displace," he told CNBC via email. "Other factors also bode well for the U.S.'s economic prospects and its persistent trade deficit, including advances in the 3-D printing which could lead to a domestic manufacturing renaissance and the shale energy revolution."
Correction: This article has been corrected to reflect that last week's economic summit was in St Petersburg.