Settlement Challenges Impacting China's Energy Trade Growth with Russia

Wednesday, 18 September 2024, 13:00

Settlement challenges are impacting China's energy trade and crude oil imports from Russia as secondary sanctions from the US intensify. Despite a slight increase in trade volume, concerns over payment systems like Swift and geopolitical tensions are straining growth. Industry experts like Chen Fengying highlight the significance of these issues in the evolving trade dynamics.
Scmp
Settlement Challenges Impacting China's Energy Trade Growth with Russia

Settlement Challenges Affecting Energy Trade

China's trade growth with Russia is facing hurdles as the settlement process becomes a major challenge amid secondary sanctions from the United States due to the Russia-Ukraine war. In the first eight months of the year, trade volume reached US$158.5 billion, marking a modest increase of 1.9% year-on-year, according to data from China Customs. This slowdown follows a period of rapid expansion, primarily attributed to pressures on Chinese financial institutions limiting their ties with Russia.

Crude Oil and Energy Trade Trends

Energy trade, essential for China-Russia relations, has softened this year. Crude oil imports from Russia declined by 7.47% in July, reflecting a broader decreasing trend after months of double-digit growth. Exports from China, particularly in transport equipment, have also witnessed drops, indicating shifting trade dynamics influenced by geopolitical factors.

Geopolitical Factors and Future Outlook

  • Chen Fengying from CICIR emphasizes that these issues are not merely about China-Russia relations but rooted in external settlement challenges.
  • Political pressures from the US have led to warnings for banks engaging in trade facilitation with Russia.
  • The overall trade volume is expected to revert to US$200 billion this year, a critical threshold amid ongoing political developments.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


Related posts


Newsletter

Get the most reliable and up-to-date financial news with our curated selections. Subscribe to our newsletter for convenient access and enhance your analytical work effortlessly.

Subscribe