Do China-Russia trade payment frictions show limits of de-dollarisation?

AI Summary

China and Russia have shifted most bilateral trade payments away from the US dollar to their own currencies. However, Chinese banks face challenges due to US sanctions, managing their exposure carefully to maintain access to the global financial system.

China and Russia have largely moved away from the US dollar in bilateral trade settlement, with most transactions now settled in their own currencies. Yet cross-border payment bottlenecks persist as Chinese banks carefully manage their exposure to Washington’s sanctions regime, according to a senior Russian banker. At the heart of the friction is a stark balancing act facing Chinese lenders: how to ease trade with Russia while safeguarding access to the US dollar-based global financial system –...