As expected, Russian entities are reportedly exploring alternative options to withstand Western financial sanctions starting with China.
A Chinese state bank’s Moscow-based branch has received hundreds of inquiries from Russian firms seeking to open new accounts, according to a «Reuters» report citing unnamed sources.
«Over the past few days, 200-300 companies have approached us, wanting to open new accounts,» said an anonymous employee of the branch, adding that the purpose was to do business with China via yuan transactions.
«It's pretty simple logic,» said an unnamed Chinese businessman with long-term ties with Russia. «If you cannot use U.S. dollars, or euros, and U.S. and Europe stop selling you many products, you have no other options but to turn to China. The trend is inevitable.»
Not One-Way
The activities do not appear to be a one-way street with top Chinese lenders also mulling «workarounds» to maintain Russian business ties without challenging Western sanctions.
One potential solution being explored is to pass on business from larger banks to smaller local banks, according to a separate «Reuters» report citing anonymous bankers.
«Smaller [Chinese] banks that don't have much presence overseas might dare do so as you cannot come to China to sanction them,» said Wang Yongli – previously a SWIFT board member and Bank of China executive director – during an investor call this week, underlining that larger Chinese lenders with overseas branches could become very cautious.
