Russian President Vladimir Putin's visit to China last month helped to ensure viable alternatives for transactions between the two countries despite sanctions, Reuters reported on June 21, citing three undisclosed sources.
Putin met his Chinese counterpart Xi Jinping in China in May, seeking to affirm Beijing's friendship and support amid Moscow's ongoing war against Ukraine and the resulting economic pressure from the West.
After the visit, specially authorized banks in border regions have enabled Russian entities to set up non-resident accounts with Chinese banks, Reuters wrote.
According to the news agency, the scheme involves smaller banks largely unnoticed by the U.S. that have little to no relations with countries that Russia considers unfriendly.
Their window of opporunity may be closing, as the U.S. announced it is seeking to identify smaller banks facilitating the sanctions circumvention.
The U.S. and other countries unveiled a new wave of sanctions on June 12 that targeted Russian financial institutions, as well as entities and individuals based in China and elsewhere that help Moscow circumvent the existing restrictions.
Trade between Russia and China has surged by 121% since 2021, underscoring the Chinese role as Moscow's economic lifeline. A functioning payment system is necessary for maintaining trade relations, and Russia was cut off from SWIFT in 2022.
While the Russian economy proved surprising resiliance in the face of Western sanctions, the measures gradually forced many Chinese banks to scale down activities with or in Russia.
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