As of: February 8, 2024, 10:44 p.m
By: Victoria Krumbeck
Comments
Press
Split
The sanctions against Russia are currently causing problems between Russian companies and Chinese banks.
The Kremlin is looking for solutions.
Moscow – Since the attack on Ukraine, the West has been trying to hit Russia with sanctions.
Russian payment transactions are being restricted, for example by excluding Russian banks from the SWIFT system.
Now the Chinese Zhejiang Chouzhou Commercial Bank is also to suspend its transactions with Russia, as the Russian newspaper
Vedomosti
reported.
Russian companies are expecting major consequences for the economy.
China stops transactions: Russia faces “logistics collapse”
Zhejiang Chouzhou Commercial Bank informed its customers last week about terminating relations with all Russian and Belarusian organizations, bank customers told
Wedemosti
.
Business associations and financial advisors also confirmed the financial collapse to the news portal.
“We have already canceled several transactions,” a business owner told the newspaper.
Bad news for Russian President Vladimir Putin: Chinese banks are stopping payment transactions with Russian companies (archive image).
© Mikhail Metzel/IMAGO
In addition, the Chinese New Year, which begins on February 10, would worsen the situation.
A “logistics collapse” is imminent, as the affected entrepreneur fears.
Exports from China to Russia could stall until at least March, the source added.
The bank is said to have previously informed another businessman who buys machine tools in China that payments for certain products that are subject to an import ban due to Western sanctions have been stopped.
Chinese banks stop payment transactions with Russia – pressure from the West
As
Vedemosti
further reported, the bank has achieved an important position for importers because the sanctions imposed against Russia are applied more loosely than with other banks.
But now that seems to be over for Zhejiang Chouzhou Bank.
Despite the war in Ukraine, Russia and China have a good relationship.
Iskander Mirgalimov, a foreign trade settlement consultant, told the newspaper that information on flows of money and goods between China and Russia would be available to Western regulators even if the SWIFT system is not used.
China's CIPS banking system is also under pressure from SWIFT as it may require information on the volume of financial transactions between China and Russia.
Kremlin admits problems with Chinese banks: “We will solve all problems”
So far, neither the Zhejiang Chouzhou Bank, the People's Bank of China nor the Russian Central Bank have responded to the newspaper's inquiries.
However, the news is unlikely to make Russian President Vladimir Putin happy.
According to the AFP news agency, the Kremlin admitted that there were problems between Russian companies and Chinese banks.
“We are in close dialogue with our Chinese friends and will solve all [...] problems,” Kremlin spokesman Dmitry Peskov told reporters on Wednesday (February 7).
The Russian government is working to solve the problem.
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According to Wiadamosti
, Zhejiang Chouzhou is
not the only bank that is regulating its business with Russia more closely.
One reason could be the fear of Western sanctions for Chinese banks if the banks treat sanctioned Russian companies too loosely.
China has become Russia's most important economic partner since the start of the Ukraine war.
(vk)