Recently, there was information that Chinese state-owned banks refused payments from a number of Russian enterprises subject to Western sanctions. Many people are curious, what does the West's sanctions against Russia have to do with China? In fact, the correlation behind it is much more complex than most of us think.
Let's start with a little bit of background. Since the Russia-Ukraine conflict, Western countries have imposed a series of economic sanctions on Russia, which have severely affected Russia's financial system. Three of China's four largest banks — the Industrial and Commercial Bank of China, China Construction Bank and Bank of China — have stopped accepting payments from sanctioned financial institutions in Russia so far this year, according to Russia**. Does this mean that financial cooperation between China and Russia may have encountered obstacles?
To understand the logic behind it, we might as well listen to the official version first. Chinese Ambassador to Russia Zhang Hanhui said in an interview with Russian media that this was because of the intervention of a third country. Who this "third country" is, I believe everyone knows in their hearts. The threat of secondary sanctions by Western countries has forced some Chinese banks to act cautiously.
In fact, Chinese companies have been affected, for example: on February 22, the United Kingdom announced more than 50 new sanctions related to Russia, and sanctioned 3 Chinese companies by the way; On February 23, the European Union announced the 13th round of sanctions against Russia, and also sanctioned 4 Chinese companies; Also on February 23, the United States added nine Chinese companies to the sanctions list. Their justification is either that these Chinese companies are cooperating with Russian companies sanctioned by the West and are suspected of helping Russia circumvent sanctions imposed by the United States and its allies.
Some friends may wonder why China should abide by these sanctions because they are not authorized by the United Nations, but are only independent acts made by some countries in accordance with their domestic laws. The Chinese side has also always stressed that we remain neutral in the conflict between Russia and Ukraine, actively promote peace talks, and do not affect the normal state-to-state exchanges between China and Russia and China and Ukraine. However, under the bandit logic of the Western world, either friends or enemies, you either follow me to sanction Russia or accept my sanctions.
What's even more disgusting is that the United States does have the ability to monitor your cross-border financial transactions by tracking cross-border financial transactions through the SWIFT system, collecting global communications and data through intelligence agencies, and stealing transaction data from other countries through technical means. If he finds out that you are dealing with companies that the West does not like, he may go after you.
In this context, some countries, led by China and Russia, have been trying to minimize risks in recent years, including building their own currency settlement systems, local currency swaps between friendly countries, and so on. According to relevant data, the proportion of RMB in bilateral international payments between China and Russia has exceeded 90%. In addition, the two countries also have their own currency swap settlement, and the proportion of the US dollar in the settlement of China and Russia is very low.
However, it will take a long time to fully avoid the risks of the Western-dominated settlement system. Note that the Bank of China then said that they will continue to accept payments from Russian businesses in rubles and yuan. This is undoubtedly a positive signal that China and Russia are looking for a solution to the problem. Frankly speaking, the so-called refusal of payment from Russian companies is only a stopgap measure, and China has other plans. We oppose the "long-arm jurisdiction" of the United States, and at the same time, we need to minimize our own risks, and we must not only dare to fight, but also be good at fighting. China does not cause trouble, and it is not afraid of trouble.