Some Russian companies are facing growing delays and rising costs on payments with trading partners in China, leaving transactions worth tens of billions of yuan in limbo, Russian sources with direct knowledge of the issue told Reuters.
Russian companies and officials for a few months have pointed to delays in transactions after Chinese banks tightened compliance following Western threats of secondary sanctions for dealing with Russia. The sources said the problem has intensified this month.
Chinese state banks are shutting down transactions with Russia “en masse” and billions of yuan worth of payments are held up, a source close to the government, who spoke on condition of anonymity.
China is Russia’s largest trading partner, accounting for a third of Russia’s foreign trade last year and supplying items such as vital industrial equipment and consumer goods that help Russia weather Western sanctions. It also provides a lucrative market for many Russian exports that China relies on, from oil and gas to agricultural products.