Russian companies are encountering severe payment delays and escalating costs in their transactions with China, with billions of yuan currently stalled in the process. These issues began when Chinese banks, wary of Western sanctions, tightened their compliance measures. The situation has deteriorated further in August, significantly impacting bilateral trade.
Chinese state banks are now blocking or delaying transactions with Russian entities, creating a bottleneck in the flow of goods and services between the two nations. This disruption has hit key sectors, including energy and commodities, where timely payments are crucial for maintaining supply chains.
To bypass these restrictions, some Russian firms have turned to intermediaries in other countries or engaged in gold trades as an alternative payment method. However, these workarounds come at a steep price, with transaction costs surging by as much as 6%. The increased costs and delays are putting additional financial strain on Russian businesses already grappling with the broader economic impacts of sanctions. This situation underscores the growing complexities in Sino-Russian economic relations amid the evolving geopolitical landscape.
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