China-Funded Banks Shun Business with Russia to Avoid Associated Sanctions

According to foreign media reports, affected by the strong hard-line sanctions stance of the West, some countries that have been adhering to maintain business dealings with Russian banks are now beating a retreat. This includes China, Turkey, the United Arab Emirates, and some of the former Soviet republics in Central Asia.Alexander Rachmanin, Vice President of the Bank of Russia, recently expressed at an economic conference in Moscow that China-funded banks such as the Bank of China and China Construction Bank have ceased their business with Russian banks listed on the Western sanctions list. In Turkey, only some secondary banks remain in cooperation with Russia, and the UAE no longer allows business to be conducted in local currency instead of the US dollar. After the outbreak of the Russia-Ukraine war, some Russian companies have transferred their business to the Gulf region, and the Moscow authorities have also set up some shell companies in the Gulf region to avoid sanctions from Western countries. More than 20 major Russian banks have been reportedly sanctioned by the West, and nine of them have been excluded from SWIFT, including the largest state-owned bank in Russia, the state-owned Russian International Trade Bank, and the Bank for Development and Foreign Economic Affairs. In the face of Western sanctions, major Russian banks have turned to strengthening business with friendly countries, but their situation will become more difficult as China, Turkey, and the United Arab Emirates withdraw from cooperation.