China
On one hand, China is supporting Russia in the war against Ukraine and on the other hand, it is betraying it by citing the same war. Since Russia has been facing economic sanctions imposed by Western countries for the last two and a half years, Chinese banks have given a severe blow to Russian President Vladimir Putin by using this as an excuse. Chinese banks have reportedly started selling their assets in Russia. Chinese banks say that due to the sanctions imposed on Moscow due to the Ukraine war, it is now finding it difficult to do business with economic partners.
Russian business outlet Frank Media reported that the Bank of China reduced its assets in Russia by 37 percent to 355.9 billion rubles ($3.9 billion) in the second quarter of 2024. The Industrial and Commercial Bank of China reduced its assets by 27 percent to 462.4 billion rubles ($5.1 billion), Frank Media said. The Chinese bank has slowed down its business in Russia due to payment problems between several countries. However, the report said that two smaller institutions, China Construction Bank and China Agricultural Bank, increased their assets in Russia by 27 percent and 9 percent, respectively.
Meanwhile, Russian President Putin has claimed that his trade with Beijing has increased. Let us tell you that China has helped a lot in supporting the Russian economy affected by the sanctions of Western countries. Russia has claimed that bilateral trade between Russia and China has reached record levels since the Ukraine-Russia war started in 2022, while the Chinese bank has talked about moving away from the global financial system led by Western countries. Now Chinese banks are shying away from doing any kind of business with Russia as they are facing payment problems.
In fact, Chinese banks’ difficulties in payment settlement began in late 2023 when US President Joe Biden issued an order to deny Chinese institutions access to the US financial system due to their involvement in business related to Russia’s military industry. After this, Chinese banks began refusing to make payments for sanctioned Russian organizations this year. In May, the Russian division of the Bank of China stopped processing yuan payments with Russian banks sanctioned by the US, while Industrial and Commercial Bank of China, China CITIC Bank and most other Chinese lenders have also taken similar steps. In June this year, sanctions were also imposed against the Moscow Exchange, due to which foreign trade settlements in dollars and euros are now suspended.
