China is Russia's largest trading partner, accounting for a third of Russian trade last year.
State-owned Chinese banks have stopped transactions with Russia en masse, with billions of yuan in payments being blocked in accounts. Problems with processing payments have worsened in August.
This was reported by Reuters, citing anonymous sources in Russian government and business circles.
The agency noted that Chinese banking institutions have taken a very strict stance on their transactions after the US Treasury Department threatened in June to impose new sanctions on banks in countries doing business with Russia.
“Currently, all cross-border payments to China are suspended. We found a solution, but it took almost three weeks, which is a very long period of time, and the volume of commercial exchanges has dropped sharply during this period,” said a source at one of Russia's main e-commerce platform companies, which sells a wide range of consumer goods imported from China.
To continue doing business with China, the Russian firm has to buy gold, ship it to Hong Kong, sell it there, and deposit the money in a local bank account.
Other sources cited by Reuters said some Russian firms had begun using third-country intermediary networks to process their transactions, thereby bypassing checks carried out by Chinese banks, but the intermediary commission had risen from zero to 6%.
China is Russia's largest trading partner, accounting for a third of Russian trade last year and supplying vital industrial equipment as well as consumer goods that help Russia cope with Western sanctions. China is also a lucrative market for many of Russia's exports, from oil and gas to agricultural products.
However, transactions with China are not a major concern for Russia's top leadership because payments in priority areas are still going smoothly and there is political will on both sides, a bank source told Reuters. Bilateral arrangements for large companies and Chinese exports of vital technology are still working well, while smaller companies trading in consumer goods are experiencing problems, the sources said.
Another source close to the Russian government told Reuters that Russian exporters are not having trouble receiving payments for goods such as oil or grain imported from China.
According to official Chinese statistics, Russia's imports from China in January-July 2024 fell by more than 1 percent (to $62 billion) due to payment problems.
Recall that earlier, the Chinese authorities announced that, amid criticism from the United States and allies over Beijing's assistance to Russia, they would tighten the rules for the export of drones intended for military use.
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