China’s banks pore over Russia transactions, causing delays and unsettling exporters
- With China under pressure to distance itself from Russia, banks are applying more scrutiny to transactions traceable to Moscow – or not processing them at all
- Delays in payments and other financial activity worries Chinese exporters, who fear repercussions but want to maintain presence in a lucrative market
As recently as this week, transactions related to Russia are receiving heightened scrutiny from Chinese banks, and smaller lenders have halted the processing of deals altogether. But even with trade becoming more encumbered, few Chinese exporters with heavy exposure to Moscow are mulling a desertion of the lucrative market.
Banks still handling payments from Russia – mostly large institutions like Bank of China – are taking extra time to review each transaction, stoking dread among exporters as payment collections are delayed and uncertainties mount.
Exporters in Zhejiang and Guangdong provinces said payments from Russia can still be received in yuan through BOC, albeit delayed, after they were told to switch to the Chinese currency this year.
“We were notified that we must change to the yuan, and now each and every remittance from Russia will be checked, so there is a delay of two to three days,” said Martin Tao, a stationery exporter in Ningbo in Zhejiang.