Exporters in China are said to be making trade with Russia more difficult by finding alternative methods to avoid international sanctions aimed at stopping Russia’s invasion of Ukraine.
According to Izvestia, Russian business representatives stated that Chinese companies, particularly those exporting goods like electronics affected by Western secondary sanctions, are trying to transport them through intermediary countries.
The situation arises as Russian companies still face challenges in making cross-border payments in China. It is now being reported that almost all Chinese banks are refusing payments in yuan from the country. Russian traders have also expressed dissatisfaction about how Chinese banks have taken advantage of Russia’s devalued currency by increasing ruble-to-yuan exchange rates in the past few days.
Last month, Ilona Gorsheneva-Dolunts, who represents the business advocacy group Opora Russia in China, informed the newspaper that Chinese suppliers had requested Russian entrepreneurs to permit them to transport goods through different countries.
Gorsheneva-Dolunts also mentioned that due to increasing Western pressure on Chinese financial institutions, even certain non-sanctioned products are being subjected to this scrutiny.
Impaya Rus Commercial Director Alexei Razumovsky informed Izvestia that agents’ commissions in logistics will increase the final cost, potentially reducing imports of these products.
Razumovsky stated that it will require time to discover more effective methods for transporting these products and emphasized the advantages of sending them through nations with positive relationships with Russia at the moment.
Analysts suggest that a significant number of Chinese exports are currently being shipped through intermediary nations with friendly relations.
In June, The Atlantic Council, a U.S. think tank, cited data from United Nations Comtrade and the Chinese government indicating a substantial increase in Chinese vehicle exports to Kyrgyzstan between 2021 and 2023, a pattern also observed in various other Central Asian nations.
This implies that a few of them wound up in Russia. The article explains that Kyrgyzstan has been consistently underreporting imports before the war, but is now allocating 25% of its GDP to automobile imports from one particular country.
Russia directly and indirectly receives shipments of vehicles from China through transshipments from other countries. Furthermore, Kazakhstan’s auto imports totaled almost $7.8 billion in 2023, exceeding the amount imported in 2021 by more than double.
Photo by Dominic Kurniawan Suryaputra on Unsplash