Russia and China hire couriers to pay for goods in gold due to problems with bank transfers (video)

After the US Treasury Department threatened secondary sanctions for financial transactions with Moscow in June, and credit institutions tightened their checks on transactions, one solution was the “golden” scheme:

gold was bought, transported to Hong Kong, sold there, and the cash was deposited into a local bank account, sources say agencies Reuters. Russia has started using gold to pay for goods from China due to problems with bank transfers.

In turn, banks that are not afraid of secondary sanctions due to the lack of global business have taken on the implementation of bilateral payments. But such organizations have outdated IT systems, so Russians have to hire couriers who send documents on transfers across the state border in order to obtain a physical seal and signature of Chinese bankers, the source noted.

Some Russian companies also use chains of intermediaries in third countries to make payments and bypass checks by Chinese banks. As a result, transaction processing costs have risen to 6% of the total costs (previously they were practically zero). A source close to the government says:

“For many small companies, this means a complete stop.”

Meanwhile Large state-owned banks in China are closing transactions with the Russian Federation en masse, which is causing payments to freeze. The scale of the disaster could be estimated at tens of billions of dollars, according to data from the Central Bank. Last year, for example, when there were significantly fewer problems with payments, businesses accumulated $21.4 billion in “foreign assets” from January to June. This year, the amounts remaining abroad grew by 108%, to $44.6 billion. This is approximately 1/10 of the economy’s export revenues, which the Central Bank estimated at $239 billion for January to July.

Kirill Babaev, head of the Institute of China and Modern Asia of the Russian Academy of Sciences, emphasizes that quotes The Moscow Times:

“Until the payment problems are resolved at the state level, we cannot count on a dynamic influx of investment from China.”

According to him, the situation is having the most acute impact on the Russian industrial sector, as there are no other The country does not yet have suppliers for many types of equipment under sanctions.

China is Russia's largest trading partner, accounting for a third of the country's foreign trade last year. According to the General Administration of Customs of the People's Republic of China, trade turnover between Moscow and Beijing reached a record $240 billion in 2023. Due to payment problems, imports from China in January-July 2024 fell by more than 1%, to $62 billion.

Russia and China may switch to barter trade to circumvent sanctions. According to Reuters sources, similar deals in agriculture will take place this fall. But Oleg Abelev, head of the analytical department at Rikom-Trust Investment Company, notes that not all types of products can be exchanged by barter. Also Russia may start paying China using cryptocurrency, the circulation of which was recently legalized by Putin.

The situation with payments to China deteriorated sharply in December 2023, when US President Joe Biden authorized the introduction of restrictions on assistance to sanctioned persons and the Russian military-industrial complex. After that Major Chinese banks have stopped accepting payments from Russia. In July, it became known that financial institutions in China secretly divide the yuan into “clean” and “dirty”, that is, those related to the Russian Federation. Chinese banks prefer not to work with the latter.

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