Skip to content
Edit post

Reuters: Chinese companies go 'underground' on Russia payments

by Kateryna Denisova April 29, 2024 11:05 AM 2 min read
Photo for illustrative purposes: China's President Xi Jinping is welcomed by his Russian counterpart Vladimir Putin (R) during the opening ceremony of "The Year of Chinese Tourism in Russia" in Moscow on March 22, 2013. (Sergei Ilnitsky/POOL/AFP via Getty Images)
This audio is created with AI assistance

Support independent journalism in Ukraine. Join us in this fight.

Become a member Support us just once

Major Chinese banks are limiting payments for transactions with Russia, fearing U.S. sanctions, Reuters reported on April 29, citing undisclosed trading and banking sources.

The Wall Street Journal reported last week that Washington is drafting sanctions that will threaten to cut off Chinese banks that aid Russia's war effort from the global financial system.

Chinese banks have stepped up scrutiny of Russia-related transactions since March or stopped doing business with Russia at all to avoid U.S. sanctions, the sources told Reuters.

"Transactions between China and Russia will increasingly go through underground channels. But these methods carry significant risks," said the head of a trade body in a southeastern province that represents Chinese businesses with Russian interests.

The threat to extend U.S. sanctions to banks in China is affecting financing even for non-military trade between Beijing and Moscow, which causes problems for small Chinese exporters, seven sources told Reuters.

Subscribe to the Newsletter
Ukraine Business Roundup

Some Chinese companies are turning to small banks at the border and underground financing channels such as money brokers, including banned cryptocurrencies, as the country's big banks pull back from financing Russia-related transactions, Reuters wrote. Others entirely left the Russian market, the sources said.

The owner of one of the companies, Wang, told Reuters that now it takes "months rather than days" for major banks to process payments from Russia, forcing businesses to either scale back or switch to unusual payment channels.

Reuters reported earlier in April, citing unnamed U.S. defense officials, that China is aiding Russia's war machine in Ukraine by providing machine tools, weapons technology, and satellite imagery.

China is also thought to be supplying Russia with semiconductors and other dual-use technologies that can be used for military purposes.

U.S. Secretary of State Antony Blinken and other American officials have previously warned China against providing Russia with lethal military aid and urged Beijing to use its influence over Moscow to help end the war.

Over the past months, multiple stories appeared in Russian media about Chinese banks scaling back their operations in and with Russia due to the pressure of Western sanctions.

Bloomberg: Russia to supply China with cheaper gas compared to European market at least through 2027
Russia is expected to export natural gas to China with prices as much as 28% below those for Russia’s European clients at least until 2027, Bloomberg reported on April 23, citing the Russian Economy Ministry’s outlook.

Support independent journalism in Ukraine. Join us in this fight.
Freedom can be costly. Both Ukraine and its journalists are paying a high price for their independence. Support independent journalism in its darkest hour. Support us for as little as $1, and it only takes a minute.
visa masterCard americanExpress

News Feed

Ukraine Daily
News from Ukraine in your inbox
Ukraine news
Please, enter correct email address
11:54 AM

Russian attack on Sumy Oblast kills 2.

A Russian rocket attack on the village of Krasnopillia in Sumy Oblast killed two civilians and injured three others, Sumy Oblast Military Administration reported on May 29.
MORE NEWS

Editors' Picks

Enter your email to subscribe
Please, enter correct email address
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Successfuly subscribed
Thank you for signing up for this newsletter. We’ve sent you a confirmation email.