The Financial Times report shows that the biggest banks in China are giving billions of dollars to Russia because sanctions pressure western lenders to leave the country.
Since the Russian invasion of Ukraine in February 2022, western regulators have taken firm action against Russia by imposing sanctions and calling on banking institutions to stop operations in the country. The newspaper said Chinese lenders were filling the gap.
According to data analyzed for the FT by the Kyiv School of Economics, the four biggest banks in China have quadrupled their influence on Russia’s banking sector since the war in Ukraine started.
At the beginning of 2022, Bank of China Ltd., Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Agricultural Bank of China Ltd. had a combined exposure of $2.2 billion. This has grown to almost $10 billion in the 14 months to the end of March this year, the report stated, citing Russian central bank data. The lenders refused to give any comments to the FT. Andrii Onopriienko, deputy development director at the Kyiv School of Economics, who compiled the data, said:
“The loans by Chinese banks to Russian banks and credit institutions, which are for the most part a case of the yuan taking the place of dollars and euros, show the sanctions are doing their job.”
