US sanctions test China’s ‘no limits’ friendship with Russia

US sanctions test China's 'no limits' friendship with Russia

BEIJING: China’s institutions are putting pressure on their trade with Russia because they fear new US sanctions will be imposed for the Ukraine conflict, testing the” no limits” friendship between the two nations.

With President Vladimir Putin scheduled to visit Beijing in May, China’s commerce with Russia has reached record peaks in recent years, leading to charges that it is boosting its long-time alliance’s business.

Beijing’s bonhomie has been tested by Washington’s new pledge to go after economic institutions that Moscow has funded, which has raised concerns for its banks, who are fearful of being shut off by themselves.

In December, President Joe Biden issued an executive order allowing the US Treasury to impose extra restrictions on international institutions that deal with Russia’s war machine.

Eight individuals from both China and Russia have reported that many Chinese lenders have stopped or slowed cross-border industry since then.

One Chinese garments wholesaler sat this week sat outside his store in a cramped trade center in Beijing as he said,” It’s difficult right now to get cash in from Russia.”

” The banks do n’t give a reason… but it’s probably due to the threat ( of sanctions ) from America”, he said, as a handful of Russian visitors browsed shelves of Chinese electronics, leather bags and tea.

According to investors, banks are imposing additional investigations on cross-border settlements to eliminate any potential exposure to sanctions, which may take months and has soaring costs, causing cash flow problems for smaller import-export businesses.

Another user of a company, who spoke to AFP under the condition of anonymity, claimed they were forced to shut down their China activities and move to Russia because they” cannot get any money from customers.”

Due to the delicate nature of discussing the trading links between Beijing and Moscow, the merchants chose to remain anonymous.

In March and April, China’s exports to Russia decreased from a high earlier in the year, as a result of the transaction hold-ups.

” Even though the sanctions were imposed to ( hinder ) the export of certain items from China, they have some impact on ordinary trade”, Pavel Bazhanov, a lawyer serving Russian businesses in China, told AFP.

He claimed that the payment processing is” starkly” in contrast to the previous rapid processing of yuan-denominated deals.