Exclusive – Russian firms rush to open Chinese bank accounts as sanctions bite – Sources | Investment News
By Samuel Shen and Andrew Galbraith
SHANGHAI (Reuters) – The Moscow branch of a Chinese state-owned bank has seen an increase in requests for information from Russian companies wanting to open new accounts, a person familiar with the matter said, as companies in the country are struggling with international sanctions after its invasion of Ukraine.
“Over the past few days, 200 to 300 companies have approached us, wanting to open new accounts,” the person, who works at the Moscow branch of a Chinese state bank and has direct knowledge of his clients, told Reuters. operations.
He declined to be named or have his bank identified because he is not authorized to speak to the media.
The extent of Russian demand for new accounts at Chinese banks was unclear, but the banking source told Reuters that many companies seeking new accounts were doing business with China and it expected the yuan transactions of these companies to increase.
Western governments are cutting off the Russian economy from the global financial system, prompting international companies to suspend sales, sever ties and dump tens of billions of dollars in investments.
China has repeatedly voiced its opposition to the sanctions, calling them ineffective and insisting it will maintain normal economic and trade exchanges with Russia.
A handful of Chinese state banks operate in Moscow, including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank.
China Construction Bank declined to comment. China’s other three state-owned banks did not respond to Reuters’ request for comment.
A Chinese businessman with long-standing ties to Russia, who also declined to be identified, said several Russian companies he works with now plan to open yuan accounts.
“It’s pretty simple logic. If you can’t use US dollars or euros, and the US and Europe stop selling you a lot of products, you have no other choice. than looking to China. The trend is inevitable,” the source told Reuters.
As a growing number of Western companies abandon Russia, the willingness of emerging market giants such as China to maintain trade relations with Moscow highlights a deep divide over Europe’s biggest crisis since World War II. This trend could threaten to undo the dominance of the US dollar in world trade.
FESCO Transportation Group, a major Russian transport and logistics company, said this week it would accept Chinese yuan from its customers, after some Russian banks were kicked out of the global financial messaging system SWIFT.
“It’s natural that Russian businesses are willing to accept the yuan,” said Shen Muhui, head of a trade body that promotes Russia-China ties.
But smaller Chinese exporters are suffering from a falling ruble, and many are suspending shipments to avoid potential losses, he said.
The Russian currency plunged to a record low of more than 17 rubles against the yuan on Wednesday, after losing nearly 40% of its value against the Chinese unit over the past week.
“Businesses will go to the yuan-ruble but in any case things will become two, three or four times more expensive for Russians because the exchange rate between the yuan and the ruble also changes,” said Konstantin Popov , a Russian entrepreneur in Shanghai. .
Shen said Russian demand for Chinese products will nevertheless increase in the long term. “The key is to resolve trade settlement issues” in the face of sanctions, he said.
(Reporting by Samuel Shen and Andrew Galbraith; Editing by Vidya Ranganathan and Sam Holmes)
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