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Russian media: Several Chinese banks stop accepting yuan payments from Russia

by Martin Fornusek and The Kyiv Independent news desk March 21, 2024 10:29 AM 2 min read
A Chinese citizen is counting Chinese yuan in Fuyang, Anhui province, China, on February 20, 2024. (Costfoto/NurPhoto via Getty Images)
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Several Chinese banks have stopped accepting payments from Russia in Chinese yuan, fearing ramifications of U.S. sanctions, the Russian state-controlled outlet Izvestia reported on March 21, citing representatives of the Russian baking sector and business.

These institutions include Ping An Bank, Bank of Ningbo, China Guangfa Bank, Kunshan Rural Commercial Bank, Great Wall West China Bank, Shenzhen Rural Commercial Bank, Dongguan Rural Commercial Bank, and China Zheshang Bank, said Alexey Poroshin, the director of the Pervaya Gruppa firm, in a comment for Izvestia.

While the reported issues with yuan payments began in mid-January, complications with financial transactions between Russia and China started last December amid tightening Western sanctions.

Chinese banks first reportedly began rejecting payments in U.S. dollars, which could be easily tracked by American authorities. Last month, China's Chouzhou Commercial Bank ended operations in Russia and Belarus, while three other major Chinese banks stopped accepting any payments from sanctioned Russian institutions.

According to Izvestia's sources, the recent restrictions on yuan payments are caused by concerns about secondary sanctions and pressure from the U.S.

Despite the ongoing issues, Russian businesses are finding ways to circumvent this barrier. Around 80% of Russian enterprises that regularly work with China opened branches in "friendly countries" that were not subjected to sanctions, allowing them to process the payments, Izvestia wrote.

Russian business leaders believe that the situation will likely improve in the future, as Moscow and Beijing are both interested in continued cooperation.

China has fostered close ties with Russia during its full-scale war against Ukraine, tightening economic cooperation and disrupting Western attempts at isolating Russia.

Reuters: Putin to visit China in May
This might be Putin’s first trip abroad after he secured his fifth term in office in the recent presidential election, broadly regarded as rigged and unfair.
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