Chinese yuan coins and banknotes can be seen in this illustration taken on February 24, 2022. REUTERS / Florence Lo / Illustration / File Photo
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SHANGHAI, March 3 – The Moscow branch of a Chinese state-owned bank has seen an increase in inquiries from Russian companies seeking to open new accounts, a man familiar with the issue said Ukraine.
“In the last few days, we have been approached by 200-300 companies that want to open new accounts,” the man, who works at the Moscow branch of a Chinese state-owned bank and has direct knowledge of its operations, told Reuters.
He refused to be named or his bank identified because he was not authorized to speak to the media.
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It was not clear how widespread Russia’s demand for new accounts in Chinese banks was, but a banker’s source told Reuters that many companies looking for new accounts were doing business with China and that he expected yuan transactions from such companies to increase. increase.
Western governments are excluding the Russian economy from the global financial system, forcing international companies to suspend sales, sever ties and dump tens of billions of dollars in investment. Read more
China has repeatedly opposed sanctions, calling them ineffective and insisting on maintaining normal economic and trade exchanges with Russia. Read more
A handful of Chinese state-owned banks operate in Moscow, including the Industrial and Commercial Bank of China (601398.SS), the Agricultural Bank of China (601288.SS), the Bank of China and the China Construction Bank (601939.SS).
China Construction Bank declined to comment. The other three Chinese state-owned banks did not respond to Reuters’ request for comment.
A Chinese businessman with long-term ties to Russia, who also declined to be identified, said several Russian companies he works with are now planning to open yuan accounts.
“It’s pretty simple logic. If you can’t use the US dollar or the euro and the US and Europe stop selling you a lot of products, you have no choice but to turn to China. The trend is inevitable,” the source told Reuters.
As a growing number of Western companies leave Russia, the desire of emerging market giants such as China to maintain business relations with Moscow underscores the deep rift surrounding Europe’s biggest crisis since World War II. This trend could threaten to remove the dominance of the US dollar in world trade. Read more
FESCO Transportation Group, a major Russian transport and logistics company, said this week it would accept Chinese yuan from customers after some Russian banks were dumped by the global financial messaging system SWIFT. Read more
“It is natural for Russian companies to want to adopt the yuan,” said Shen Muhui, head of a trade organization that promotes ties between Russia and China.
But small Chinese exporters are suffering from the collapse of the ruble, and many are suspending supplies to avoid potential losses, he said.
The Russian currency fell to a record low of more than 17 rubles per yuan on Wednesday, losing nearly 40% of its value against the Chinese unit in the past week.
“Companies will switch to the yuan-ruble business, but in any case things will become two, three or four times more expensive for Russians, because the exchange rate between the yuan and the ruble is also changing,” said Konstantin Popov, a Russian entrepreneur in Shanghai. . .
Shen said Russian demand for Chinese goods would still grow in the long run. “The key is to resolve trade settlement issues in the face of sanctions,” he said.
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Report by Samuel Shen and Andrew Galbraith Edited by Vidya Ranganathan and Sam Holmes
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