US sanctions have created obstacles for Russian imports of Chinese cars, which have been crucial for the domestic market in recent years.
Payment Issues Between Russia and China
According to Reuters, payment issues between Russia and China are at the heart of the problem, as US sanctions have led to complex financial arrangements involving small regional Chinese banks.
Alexei Podshchekoldin, president of the Association of Russian Automobile Dealers, highlighted smaller importers' difficulties, including bounced payments.
The issue not only affects Russian businesses but also reduces Chinese exports. Podshchekoldin noted that even when Russian banks have ruble accounts in China, transactions are often stalled and do not proceed for completion.
Read also: Joe Biden Keeps Donald Trump's China Tariffs Despite Clashing on Many Policy Issues: Here's Why
Chinese Car Exports
Major Russian and Chinese banks previously handled these transactions, but many have been blocked or added to sanctions lists. According to Chinese customs data, Chinese car exports to Russia increased by 36% year over year to $4.86 billion from January to May.
Podshchekoldin said that even large domestic producers face payment issues when purchasing spare parts. He suggested the possibility of a joint bank or electronic remedy to resolve these issues but acknowledged that barter trading for cars and spare parts, unlike raw materials, is impractical.
Join the Conversation