China's big banks are putting the brakes on certain transactions with Russia due to concerns about potential U.S. sanctions.
As per a report by Reuters, the looming idea of extending these sanctions to Chinese banks is making people worry about the money flow that supports trade between China and Russia, not just military deals. This is causing more trouble for small Chinese exporters, according to sources cited in the report. The Western superpower has reportedly accused the dragon of "powering" Moscow's war effort.
As major banks in China are stepping back from financing transactions tied to Russia, certain Chinese companies have started exploring other options.
For instance, some of them are turning towards smaller banks on the border and unconventional financing routes like money brokers and banned cryptocurrencies. "You simply cannot do business properly using the official channels," one of the sources said.
A banker from one of China's Big Four state banks mentioned that they've ramped up their scrutiny of businesses linked to Russia to steer clear of potential sanctions risks. "The main reason is to avoid unnecessary troubles," the banker stated.
Following a five-and-a-half-hour meeting in Beijing with China's top diplomat Wang Yi, U.S. Secretary of State Antony Blinken expressed "serious concern" over the issue. He also conveyed his concerns that China might be supporting Russia's aggressive actions in Ukraine.
Since the inception of the Russia-Ukraine war, US has imposed several trade barriers alongside sanctions on the former nation.
