The Chouzhou Commercial Bank of China has ceased operations with Russian and Belarusian companies due to sanctions, posing logistical problems and potential inflation for Russian consumers.
A major Chinese bank has ceased operations with Russian and Belarusian companies, tightening regulations around transactions to comply with Western sanctions. The Kremlin is working with the Chinese government to resolve the commercial problems between the two nations. Since the West’s initial sanctions on Russia in February 2022 after its invasion of Ukraine, Chinese banks have become key commercial partners for Russian companies, facilitating increased Sino-Russian trade. Chouzhou’s decision was related to U.S. President Joe Biden’s December 22 executive order, strengthening sanctions on financial institutions that aid the Russian military.
Russian consumers may face shortages or inflation as a result, although Chouzhou’s decision will not be paralyzing for Russia. Sinologist Aleksei Chigadaev of Leipzig University said that these tensions show that China is prioritizing its relationship with the United States over Russia. However, Ali Wyne, a senior research and advocacy adviser for U.S.-China at the nonprofit International Crisis group, said that Chouzhou’s decision does not necessarily reflect a recalibration in the Sino-Russian relationship. He wrote, “Beijing and Moscow are drawing closer, not drifting apart.”