“Friendly” Chinese banks have taken an “unfriendly” step for Russian business

According to Alexey Poroshin, General Director of Pervaya Gruppa, at least eight credit organizations, such as “Great Wall West China”, “China Guangfa”, “Shenzen Rural Commercial” and “China Zheshang”, have refused to service Russian payments in yuan.

Also, yuan payments are not accepted in international banks – “CitiBank”, “Standard Chartered Bank”, “HSBC”, “JP Morgan”, “BNP Paribas”, “Deutsche Bank” and “Mizuho Bank”. Most of these banks refused to carry out operations with clients already two years ago, specified sources in the Russian banking sphere.

Chinese credit organizations have been blocking yuan payments since mid-January. The new restrictions are said to be the result of pressure from the US over fears of secondary sanctions potentially denying access to dollar payments.

Certain banks have warned their clients that they are temporarily suspending yuan transactions with Russia, but there is no such information officially, says Olegs Abelevs, head of the analytical department of “Rikov-Trast”.

Refusal to accept payments in yuan will significantly hamper the ability of Russian companies to make international payments. Experts point out that theoretically, payments can be continued in other ways – through Russian banks that have branches in China or some other “friendly” country, as well as through the services of partners in Hong Kong. In addition, 80% of Russian companies that regularly cooperate with China have already opened branches in “friendly countries”.

Before that, it was reported that most Chinese banks stopped making dollar transfers from Russia, and also started delaying payments due to additional checks. However, there are transactions in national currencies.

Three of the four largest Chinese banks have stopped working with sanctioned banks from Russia – they are “Industrial and Commercial Bank of China” (ICBC), “China Construction Bank” (CCB) and “Bank of China”. Likewise, the largest Russian importer bank “Chouzhou Commercial” has stopped operations with Russia.

The Kremlin emphasized that “publications on the topic of payment problems have been seen” and promised to address these issues “in a broad dialogue with China’s friends.”