Bloomberg: Chinese banks are very cautious about Russian financing

Many Chinese state-owned banks restrict financing for the purchase of raw materials from Russia. According to Bloomberg insiders, they are doing this out of fear of Western sanctions following the invasion of Ukraine. According to the news agency, this is at least about the ICBC and the Bank of China.

China and Russia have significantly strengthened their ties since Moscow annexed Crimea in 2014, when sanctions were imposed on Russia. For example, China bought more Russian raw materials to stimulate economic growth. For example, the country accounts for about 30 percent of Russia’s oil and gas sales.

Banks fear that allowing funding could be interpreted as support for Moscow’s invasion of Ukraine. Doing so would lead to sanctions by the United States and its allies. Sources say this is a temporary decision for the time being. ICPC is the largest bank in the world in terms of assets, while the Bank of China is the largest commercial bank in the country for currency trading.

The invasion of Ukraine, ordered by Russian President Vladimir Putin, triggered a wave of international sanctions against Moscow, mostly from the West. Washington, among others, has imposed sanctions on energy company Gazprom and other major Russian companies that can no longer raise money in Western financial markets.

China, on the other hand, does not want to destroy its relationship with Russia. Putin, who recently visited the Beijing Winter Olympics, strengthened ties with China. In particular, the two countries agreed to intensify their cooperation in the field of finance and gas supply.

Beijing did not condemn or unconditionally support the invasion of Ukraine. China on Friday ignored a UN resolution condemning Russia’s “aggression” against Ukraine and demanding the immediate withdrawal of troops. Russia vetoed the resolution.