Chinese banks are increasingly reluctant to conduct business transactions with Russia

Chinese banks are becoming more cautious in their dealings with Russian companies.
Chinese bank Zhejiang Chouzhou Commercial Bank, often used by Russian importers, has stopped all transactions, according to a report by Russian business media outlet Vedomosti on Wednesday.
Last week, several businessmen were affected by a decision that was communicated to bank clients. An unnamed source informed Vedomosti that Russian businesses have expressed concerns about possible logistics disruptions if payment settlements do not resume after the weeklong Chinese New Year holiday, starting this Friday.
According to a media outlet, some Chinese banks are now implementing stricter compliance checks when conducting business with Russian enterprises. The Kremlin has acknowledged this issue, and Dmitry Peskov, the spokesperson, mentioned that the authorities are actively addressing this with Beijing. During a press briefing on Wednesday, Peskov stated that they have a close dialogue with their Chinese counterparts, and they will resolve any issues that arise. The AFP reported this.
In December, the United States authorized secondary sanctions targeting financial institutions that help Russia evade sanctions. These trade restrictions have proven effective, despite Russia’s efforts to maintain its trade activities, especially in energy exports. Although Russia has been resilient against primary Western sanctions related to the Ukrainian invasion, the escalating sanctions from the West are making even Chinese companies cautious.
In response to the new restrictions imposed by the US in December, at least two state-owned Chinese banks have initiated reviews of their Russian operations, as reported by Bloomberg on January 16.
This is not the first instance of Chinese banks tightening compliance with Western sanctions. In June, Bank of China, one of the major Chinese banks, began limiting transfers from Russia.