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Chinese banks have fallen in love with Russia: should we expect problems with the supply of electronics?

Date: May 22, 2024 Time: 10:36:02

Photo: Dmitry POLUKHIN

Chinese banks are increasingly refusing to process payments from Russian companies. Problems began to arise at the beginning of the year, after the United States threatened third-country banks and their top managers with sanctions for helping Russia. In April the situation worsened. The supply of goods that, at least theoretically, can be used, including for military and defense purposes, has practically stopped, at least through the above channels. For example, electronics, which now comes to us mainly from China. These include finished products, such as servers, data storage systems, computers, and components for assembling hardware in Russia itself. However, several banks have started to play it safe and block any payment for goods destined for Russia. Another part of the Chinese banks began to ask for a bunch of additional confirmations: that the Russian bank and the company from which the money comes have no relationship with the military-industrial complex, as well as with the LPR, the DPR and Crimea. In this case, deals are delayed at the very least and often blocked anyway.

The problem was confirmed at the congress of the Association of Russian Banks by VTB director Andrei Kostin. According to him, if a year ago, when making transfers to banks in friendly countries, including China, it was important to exclude sanctioned companies from the chain and not use the SWIFT system, now the central problem is the actual geographical location. location (Russia).

What does all this mean for the Russian consumer? Will we be left without some electronic devices or appliances that mostly come to us from China or whose production uses Chinese components? As market participants anonymously told KP, no catastrophe is observed: “the problems are being solved”, fortunately Russian companies are no longer used to this.

-This is a repeatable situation, it has been occurring periodically since March 2022. Simply this time more attention was paid to it. What usually happens in practice? Several banks block accounts of Russian companies and transfers through them. Several other banks open accounts for our companies. It takes between a week and a half to three weeks, depending on who it is,” Eldar Murtazin, lead analyst at Mobile Research Group, told KP. “The cost of doing business doesn’t really change because of this, nothing really changes. During these one and a half to three weeks, someone’s products may stagnate and prices may rise. But this is not the entire market, typically 15 percent, but rather distributors who specialize in narrow niches. When everything stabilizes, your prices will stabilize too. Completely blocking supply channels from China to us is so unlikely that we can’t even discuss it.

As can be seen from the words of Andrei Kostin at the banking congress, there are several options for solving the problems that arise in terms of foreign trade agreements at the global level. The first option is to create a financial platform for the BRICS countries, which would be used for direct agreements between member countries (currently there are ten: Brazil, Russia, India, China, South Africa, Iran, Saudi Arabia, United Arab Emirates). , Egypt, Ethiopia). The second is settlements in digital currencies. But it takes time to implement these options.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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