Cross-border payments in Sino-Russian trade: Settlement difficulties under the shadow of sanctions
In 2024, Western sanctions will be intensified, and China's banking industry will face severe challenges, especially its precarious position in the US dollar clearing system, forcing many major banks to tighten their dollar transactions with Russia, and credit services will be significantly reduced or even interrupted. With the expansion of US secondary sanctions, cross-border payments between China and Russia have fallen into difficulties. Banks such as Hunchun Rural Commercial Bank and VTB have stopped cross-border remittance business, corporate account collection has been blocked, and Sino-Russian trade channels have been blocked.
Commodities such as bulk commodities, auto parts, and agricultural machinery and equipment are stranded due to payment difficulties, and the transaction cycle has been extended to one to three months. The review of dual-use products is more stringent, and incomplete documents will lead to transaction failures. The Russian Automobile Dealers Association has also warned that settlement difficulties may lead to the suspension of Chinese imports. The report of the Chongyang Institute of the National People's Congress pointed out that SPFS and CIPS transactions were blocked, 80% of transactions were forced to be interrupted, and Sino-Russian two-way investment encountered major challenges. Chinese and Russian companies urgently need to find new payment and settlement paths to break through the difficulties under the shadow of sanctions.
