\n
President Vladimir Putin is due to visit Beijing in May – Copyright AFP TAUSEEF MUSTAFA<\/small><\/em><\/p>\nMatthew WALSH, Oliver HOTHAM<\/em><\/p>\nChinese banks are tightening scrutiny over trade with Russia for fear of incurring strict new US sanctions over the Ukraine war, testing the \u201cno limits\u201d friendship between the two countries.<\/p>\n
China\u2019s trade with Russia has hit record highs in recent years, drawing accusations that it is helping buoy its longtime ally\u2019s economy, with President Vladimir Putin due to visit Beijing in May.<\/p>\n
But Washington\u2019s recent vow to go after financial institutions that help Moscow fund the conflict has tested the boundaries of Beijing\u2019s bonhomie \u2014 and left its banks fearful of getting cut off themselves.<\/p>\n
An executive order by President Joe Biden in December permits secondary sanctions on foreign banks that deal with Russia\u2019s war machine, allowing the US Treasury to cut them out of the dollar-led global financial system.<\/p>\n
Since then, several Chinese banks have halted or slowed transactions with Russian clients, according to eight people from both countries involved in cross-border trade.<\/p>\n
\u201cAt the moment, it\u2019s tough to get money in from Russia,\u201d said one Chinese clothing wholesaler as he sat outside his store at a cavernous trade centre in downtown Beijing this week.<\/p>\n
\u201cThe banks don\u2019t give a reason\u2026 but it\u2019s probably due to the threat (of sanctions) from America,\u201d he said, as a handful of Russian visitors browsed shelves of Chinese electronics, leather bags and tea.<\/p>\n
Traders said banks are imposing extra checks on cross-border settlements to rule out any risk of exposure to sanctions \u2014 screening that can take months and has jacked up costs, sparking cash flow crises at smaller import-export businesses.<\/p>\n
Another business owner told AFP on condition of anonymity they had been forced to close their China operations and return to Russia as they \u201ccannot get any money from customers\u201d.<\/p>\n
The traders declined to be identified due to the sensitivity of discussing Beijing and Moscow\u2019s trading relationship.<\/p>\n
The payment hold-ups have coincided with a fall in Chinese exports to Russia during March and April, down from a surge early in the year.<\/p>\n
\u201cEven though the sanctions were imposed to (hinder) the export of certain items from China, they have some impact on ordinary trade,\u201d Pavel Bazhanov, a lawyer serving Russian businesses in China, told AFP.<\/p>\n
The slowdown in payment processing contrasts \u201cstarkly\u201d with the rapid handling of yuan-denominated transactions in the past, he said.<\/p>\n
\u2013 \u2018Better safe than sorry\u2019 \u2013<\/p>\n
Trade between China and Russia has boomed since the Ukraine invasion and hit $240 billion in 2023, according to Beijing\u2019s customs figures.<\/p>\n
But reports that Russian companies were struggling to clear payments with Chinese banks first emerged in the Russian media at the start of the year.<\/p>\n
The Kremlin admitted the problem in February, with spokesperson Dmitry Peskov later slamming \u201cunprecedented\u201d US pressure on China.<\/p>\n
Beijing has not publicly acknowledged the delays but its foreign ministry told AFP it opposed \u201cunilateral and illegal US sanctions\u201d.<\/p>\n
Behind the scenes, however, Chinese banks are ensuring they do not put targets on their backs, analysts said.<\/p>\n
\u201cFinding out whether the payments are related to the Russian military-industrial complex\u2026 is creating a considerable challenge for Chinese companies and banks,\u201d said Alexander Gabuev, director of the Carnegie Russia Eurasia Center in Berlin.<\/p>\n
\u201cThey are operating on better-be-safe-than-sorry principles, which reduces the volume of transactions,\u201d he told AFP.<\/p>\n
\u2013 Mending US ties \u2013<\/p>\n
President Xi Jinping and Putin have made much of their countries\u2019 \u201cno limits\u201d friendship, and the Russian leader told a business forum last month a visit to China had been planned for May.<\/p>\n
But slowing domestic growth in China has created incentives for Beijing not to invite further damage to its economy, the Wilson Center\u2019s William Pomeranz said.<\/p>\n
Other experts said the banks\u2019 newfound caution reflected Beijing\u2019s desire to manage its rivalry with the United States ahead of this year\u2019s election.<\/p>\n
Ties between the world\u2019s two largest economies have steadied in recent months after years-long spats over trade, technology and other issues.<\/p>\n
Chinese officials may have directed banks to scrutinise Russia payments to ensure they not create \u201ca wedge issue in the US election\u201d, said Wang Yiwei, head of the Institute of International Affairs at Renmin University of China.<\/p>\n
\u201cChina would not be stupid enough\u201d to let a major bank fund Russia\u2019s war, Shanghai-based international relations scholar Shen Dingli said.<\/p>\n
\u201c(They) won\u2019t give the US the option to impose full sanctions.\u201d<\/p>\n
\u2013 No greenbacks \u2013<\/p>\n
Part of the solution could be a move long touted by countries keen to shield themselves from US sanctions: financial systems independent of the US dollar, experts said.<\/p>\n
Alexandra Prokopenko, a former advisor at Russia\u2019s Central Bank, told AFP that Moscow\u2019s wartime pivot to Asia has seen the \u201cfine-tuning of a system for cross-border payments in national currencies (yuan and rubles)\u201d.<\/p>\n
The system allows banks to skip traditional financial infrastructure like the SWIFT messaging system, insulating them against the effects of sanctions, she said.<\/p>\n
Current payment glitches show that approach is \u201cnot a panacea\u201d, Prokopenko told AFP.<\/p>\n
But \u201cMoscow and Beijing are quite adept at adapting processes to an ever-changing environment,\u201d she said.<\/p>\n<\/p><\/div>\n
US sanctions test China’s ‘no limits’ friendship with Russia
\n
#sanctions #test #Chinas #limits #friendship #Russia<\/p>\n","protected":false},"excerpt":{"rendered":"
President Vladimir Putin is due to visit Beijing in May – Copyright AFP TAUSEEF MUSTAFA…<\/p>\n","protected":false},"author":1,"featured_media":8503,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[7],"tags":[1880,4854,4853,1235,2733,2947],"yoast_head":"\n
US sanctions test China's 'no limits' friendship with Russia - International Pulse<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/internationalpulse.net\/?p=9095\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US sanctions test China's 'no limits' friendship with Russia - International Pulse\" \/>\n<meta property=\"og:description\" content=\"President Vladimir Putin is due to visit Beijing in May – Copyright AFP TAUSEEF MUSTAFA...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/internationalpulse.net\/?p=9095\" \/>\n<meta property=\"og:site_name\" content=\"International Pulse\" \/>\n<meta property=\"article:published_time\" content=\"2024-05-13T07:22:56+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/internationalpulse.net\/?p=9095\",\"url\":\"https:\/\/internationalpulse.net\/?p=9095\",\"name\":\"US sanctions test China's 'no limits' friendship with Russia - International Pulse\",\"isPartOf\":{\"@id\":\"https:\/\/internationalpulse.net\/#website\"},\"datePublished\":\"2024-05-13T07:22:56+00:00\",\"dateModified\":\"2024-05-13T07:22:56+00:00\",\"author\":{\"@id\":\"https:\/\/internationalpulse.net\/#\/schema\/person\/d507bf8682a9ef7e3ad7a69d9db5e1c3\"},\"breadcrumb\":{\"@id\":\"https:\/\/internationalpulse.net\/?p=9095#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/internationalpulse.net\/?p=9095\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/internationalpulse.net\/?p=9095#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/internationalpulse.net\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"US sanctions test China’s ‘no limits’ friendship with Russia\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/internationalpulse.net\/#website\",\"url\":\"https:\/\/internationalpulse.net\/\",\"name\":\"International Pulse\",\"description\":\"There's a different sound here\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/internationalpulse.net\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/internationalpulse.net\/#\/schema\/person\/d507bf8682a9ef7e3ad7a69d9db5e1c3\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/internationalpulse.net\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/f8e3f392738821708fe4235b6ffa7215?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/f8e3f392738821708fe4235b6ffa7215?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"http:\/\/demo6.aiwalls.com\/automatic-news\"],\"url\":\"https:\/\/internationalpulse.net\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"US sanctions test China's 'no limits' friendship with Russia - International Pulse","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/internationalpulse.net\/?p=9095","og_locale":"en_US","og_type":"article","og_title":"US sanctions test China's 'no limits' friendship with Russia - International Pulse","og_description":"President Vladimir Putin is due to visit Beijing in May – Copyright AFP TAUSEEF MUSTAFA...","og_url":"https:\/\/internationalpulse.net\/?p=9095","og_site_name":"International Pulse","article_published_time":"2024-05-13T07:22:56+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/internationalpulse.net\/?p=9095","url":"https:\/\/internationalpulse.net\/?p=9095","name":"US sanctions test China's 'no limits' friendship with Russia - International Pulse","isPartOf":{"@id":"https:\/\/internationalpulse.net\/#website"},"datePublished":"2024-05-13T07:22:56+00:00","dateModified":"2024-05-13T07:22:56+00:00","author":{"@id":"https:\/\/internationalpulse.net\/#\/schema\/person\/d507bf8682a9ef7e3ad7a69d9db5e1c3"},"breadcrumb":{"@id":"https:\/\/internationalpulse.net\/?p=9095#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/internationalpulse.net\/?p=9095"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/internationalpulse.net\/?p=9095#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/internationalpulse.net\/"},{"@type":"ListItem","position":2,"name":"US sanctions test China’s ‘no limits’ friendship with Russia"}]},{"@type":"WebSite","@id":"https:\/\/internationalpulse.net\/#website","url":"https:\/\/internationalpulse.net\/","name":"International Pulse","description":"There's a different sound here","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/internationalpulse.net\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/internationalpulse.net\/#\/schema\/person\/d507bf8682a9ef7e3ad7a69d9db5e1c3","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/internationalpulse.net\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/f8e3f392738821708fe4235b6ffa7215?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f8e3f392738821708fe4235b6ffa7215?s=96&d=mm&r=g","caption":"admin"},"sameAs":["http:\/\/demo6.aiwalls.com\/automatic-news"],"url":"https:\/\/internationalpulse.net\/?author=1"}]}},"featured_image_urls":{"full":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal.png",1200,675,false],"thumbnail":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-150x150.png",150,150,true],"medium":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-300x169.png",300,169,true],"medium_large":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-768x432.png",640,360,true],"large":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-1024x576.png",640,360,true],"1536x1536":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal.png",1200,675,false],"2048x2048":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal.png",1200,675,false],"covernews-slider-full":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-1115x675.png",1115,675,true],"covernews-slider-center":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-800x500.png",800,500,true],"covernews-featured":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-1024x576.png",1024,576,true],"covernews-medium":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-540x340.png",540,340,true],"covernews-medium-square":["https:\/\/internationalpulse.net\/wp-content\/uploads\/2024\/05\/Digital-Journal-400x250.png",400,250,true]},"author_info":{"display_name":"admin","author_link":"https:\/\/internationalpulse.net\/?author=1"},"category_info":"<a href=\"https:\/\/internationalpulse.net\/?cat=7\" rel=\"category\">Stories<\/a>","tag_info":"Stories","comment_count":"0","_links":{"self":[{"href":"https:\/\/internationalpulse.net\/index.php?rest_route=\/wp\/v2\/posts\/9095"}],"collection":[{"href":"https:\/\/internationalpulse.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/internationalpulse.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/internationalpulse.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/internationalpulse.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9095"}],"version-history":[{"count":0,"href":"https:\/\/internationalpulse.net\/index.php?rest_route=\/wp\/v2\/posts\/9095\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/internationalpulse.net\/index.php?rest_route=\/wp\/v2\/media\/8503"}],"wp:attachment":[{"href":"https:\/\/internationalpulse.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/internationalpulse.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/internationalpulse.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}