TRANSACTIONS SLOW
Trade between China and Russia has boomed since the Ukraine invasion and hit US$240 billion in 2023, according to Chinese customs figures.
But after Washington vowed to go after financial institutions that facilitate Moscow, Chinese exports to Russia dipped during March and April, down from a surge early in the year.
An executive order by President Joe Biden in December permits secondary sanctions on foreign banks that deal with Russia’s war machine, allowing the US Treasury to cut them out of the dollar-led global financial system.
That, coupled with recent efforts to rebuild fractured ties with the United States, may make Beijing reluctant to openly push more cooperation with Russia – despite what Moscow may want, analysts said.
Eight people from both countries involved in cross-border trade told AFP in recent days that several Chinese banks have halted or slowed transactions with Russian clients.
According to Alexander Gabuev, director of the Carnegie Russia Eurasia Center in Berlin, the banks are “operating on better-be-safe-than-sorry principles, which reduces the volume of transactions”.
“Finding out whether the payments are related to the Russian military-industrial complex … is creating a considerable challenge for Chinese companies and banks,” he told AFP.
Putin’s post-election trip to Beijing echoes Xi’s own visit to Russia after his re-anointing as leader last year.
Experts expect this week’s highly symbolic meeting to result in toasts of the “no limits” partnership, as well as some deals signed and pledges to increase trade.
The two leaders are set to sign a joint declaration following the talks, the Kremlin said, and attend an evening marking 75 years of diplomatic relations between the two countries.
Putin will also meet Premier Li Qiang – China’s number two official – and travel to the northeastern city of Harbin for a trade and investment expo.
