Bloomberg reported problems with payments between China and Russia.

Russian exporters are increasingly facing problems making payments to China amid the expansion of US sanctions in June: such transactions are either frozen or significantly delayed, Bloomberg reports, citing interviews with top managers of major Russian suppliers.

Thus, direct payments from China to Russia, even using yuan, are practically impossible, complain senior managers who asked to remain anonymous. One of them, a representative of an agricultural trading company, reported that even some Chinese buyers of Russian agricultural products have experienced payment issues this month.

The agency's sources said that even if they encounter problems with making payments, it is becoming increasingly difficult to find alternative payment methods, including using cryptocurrencies or "straw countries."

"We haven't yet seen a clear collapse in imports due to delays, but ruble imports have already begun to decline," said Dmitry Polevoy, investment DIRECTOR at Astra Asset Management, referring to payment processing delays. He added that ruble imports "will decline significantly after a recovery in 2023."

Bloomberg recalls that the trade difficulties were preceded by the US expanding the parameters for determining the need for secondary sanctions, including against foreign companies. Specifically, the definition of Russia's military-industrial base was expanded.

The agency calls these measures "draconian," noting that they are already slowly impacting the country's economy. Since the end of last year, Russia has also encountered difficulties making payments to the UAE, Turkey, and India, Bloomberg notes, also attributing these difficulties to US sanctions.

According to data from the General Administration of Customs of China on July 12, Chinese exports to Russia increased by almost 2% in the first half of 2024 compared to the same period in 2023, reaching 366.81 billion yuan in monetary terms. However, in DOLLAR terms, Chinese exports to Russia decreased by 0.8% in the first half of 2024 , reaching $51.66 billion. Moreover, exports grew for the second consecutive month in June, following a decline observed in March and April amid payment issues.

At the end of 2023, US President Joe Biden authorized the imposition of secondary sanctions against foreign financial institutions for involvement in deals related to supplies to the Russian defense industry. Violators face being added to the Specially Designated Non-Profit Organization (SDN) list or restrictions on their correspondent accounts with US credit institutions. Following this, several major Chinese banks, including Chouzhou Commercial, Industrial, and Commercial Bank ofCHINA (ICBC), China Construction Bank (CCB) and Bank of China have stopped accepting payments from Russian banks subject to Western restrictions.

Both Russia and China have repeatedly spoken out against US sanctions. President Vladimir Putin has stated that Russia-China cooperation on the global stage contributes to the formation of a just world order. The Kremlin has ruled out any impact of the restrictions on the "further development of trade and economic relations" between Moscow and Beijing.

Chinese Foreign Minister Wang Yi called Moscow-Beijing relations "rock-solid." "They are immune to interference and provocation, and they are not afraid of major changes in the situation," he noted.