Chinese Banks Off-Load Russia Assets in Blow to Putin

Monday, September 09, 2024

Chinese banks have reportedly reduced their assets in Russia as sanctions against Moscow over President Vladimir Putin's full-scale invasion of Ukraine continue to complicate trade between the economic allies.

Posted by Corky at 01:33 PM | 5 COMMENTS | permalink | Comment on This Entry |

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"While Putin may have touted a pivot away from the Western-led global financial system, Chinese banks are becoming increasingly wary of doing business with Russia, taking steps to avoid U.S. secondary sanctions and delaying and rejecting payments from Russia.

Difficulties with settlements began at the end of 2023 after an executive order by U.S. President Joe Biden threatened to deprive Chinese institutions access to the U.S.

financial system over their involvement in trade linked to Russia's military industry."

#1 | Posted by Corky at 2024-09-09 12:28 AM | Reply

Chinese jerk the chain every once in a while to remind the Russians which of the two nations is the subservient client state.

#2 | Posted by Doc_Sarvis at 2024-09-09 05:32 AM | Reply | Newsworthy 1

Russian state debt is priced in the market like low grade dog food. To wit:
-11/30/32 Russia Eurobond with 1.85% coupon quoted at 1064bp spread over the UST 7-yr, so about 12.63% yield
-3/28/35 Russia Eurobond with 5.10% coupon quoted at 1351 spread over the UST 10-yr, so about 17.20% yield

Add on top of that the currency risk, risk in the price of oil (the proceeds of which are used to fund that debt) and the political risk of dealing with one of the world's most hated men, and an investor gets a good bite of risk in buying such paper. It's easy to see why the Chinese have little interest in holding such assets...

#3 | Posted by catdog at 2024-09-09 02:11 PM | Reply

Anything that nakes Putin unhappy makes me happy. Maybe when the warin Ukraine becomes unaffordable the Russian troops will go home and pwace will blossom! Or, peace will probably have to wait for Putin to die because his ego is so enmeshed in this costly but unwinnable war; while he still breathes the war will continue so I hope he dies soon and suffers at the end!

#4 | Posted by danni at 2024-09-09 03:36 PM | Reply

Wow... imagine that! Even Xi thinks Putin is too bad for business.

#5 | Posted by RightisTrite at 2024-09-09 03:55 PM | Reply