To settle payments for its electrical goods, the Guangdong-based company is considering using currency brokers active along China's border with Russia, said the company's founder, Wang, who asked to be identified only by his family name. The U.S. has imposed an array of sanctions on Russia and Russian entities since the country invaded Ukraine in 2022. Now the threat of extending these to banks in China - a country Washington blames for "powering" Moscow's war effort - is chilling the finance that lubricates even non-military trade from China to Russia.
Russian firms' efforts to make payments for goods in China as secondary sanctions fears spook local banks have generated a flourishing market for middlemen, four sources told Reuters, with up to half of transactions now handled by intermediaries. The U.S. Treasury has warned it could apply sanctions on those facilitating transactions with Russia, calling on foreign banks to boost compliance.
Washington hopes they will allow Secretary of State Antony Blinken to arrive armed with diplomatic leverage on a visit to China this week, in a push to stop Beijing's commercial support of Russia's military production.
The U.S. plans sanctions on Chinese banks to halt support for Russia s military, risking global financial system ties. Blinken to address in China. Concerns over impact on China s economy and yuan trade with Russia.