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Businesses China

Russian Firms Rush To Open Chinese Bank Accounts (reuters.com) 90

Posted by msmash from the chaos-ensues dept.
The Moscow branch of a Chinese state bank has seen a surge in enquiries from Russian firms wanting to open new accounts, Reuters a person familiar with the matter said, as the country's businesses struggle with international sanctions after its invasion of Ukraine. From a report: "Over the past few days, 200-300 companies have approached us, wanting to open new accounts," the person, who works at the Moscow branch of a Chinese state bank and has direct knowledge of its operations, told Reuters.

It was not clear how widespread Russian demand for new accounts at Chinese banks was, but the banker source told Reuters many of the companies seeking new accounts do business with China and that he expected yuan transactions by such firms to increase.
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Russian Firms Rush To Open Chinese Bank Accounts More

Russian Firms Rush To Open Chinese Bank Accounts

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  • Looks like it. Time to start looking for alternative manufacturing bases. Boycott iPhones?

    • Re: (Score:2)

      by drnb ( 2434720 )
      Or the US and EU can sanction China to some proportional degree. Proportional being 2x or 3x what the Russian company washed through china.
    • every bit of electronics is made in China save a handful made near China. Motorola briefly did major assembly in the States (they thought it would give them a competitive edge, it didn't) but even then the electronics components were made in China.

      So long as China lets manufactures pour poison into the air and water and America doesn't we can't compete, even with factories that are almost 100% automated. This is one of those places were raw capitalism isn't going to work. Diplomacy might let us use Chin
      • A lot of electronics are assembled in China with parts made elsewhere. For example, curious about the phrase "diffused in X" that appears in some AMD processors? This has something to do with the complex cross-country process involved in churning out electronic devices and components.

    • It's going towards that, but I must suggest that it would be wise to solve the Russia/Ukraine problem before jumping into sanctions against other countries.

      Otherwise we will make the mistake Russia made in Ukraine: jumping in on too many fronts, and being successful on none of them.

    • Nations need to be self-sustainable in terms of manufacturing and energy production. I hope the pandemic and now this war has taught the world that lesson. It must be done. Time will tell if anyone is paying attention to these national security issues.
  • Aaaaand we are back to square one. Blocking them from Swift does make more sense now.

    • Re: (Score:2)

      by RobinH ( 124750 )
      My understanding is that blocking them from SWIFT was more symbolic than anything. The sanctions were far worse, particularly blocking transactions through New York. That's what will cause Russia the most pain.

    • Aaaaand we are back to square one. Blocking them from Swift does make more sense now.

      Lukoil is crying uncle [9gag.com]. They're probably on the list to get a Chinese bank account. Won't help though. No one is buying [marketwatch.com] Russian oil, at any price [nytimes.com].

    • Re: (Score:2)

      by Tailhook ( 98486 )

      The Chinese have setup there own "SWIFT" alternative called "CIPS".

      China is an enemy. You can pretend all you want they aren't, but eventually, inevitably, you will be wrong.

      • You are right. And Clinton gave them the opportunity to grow with his favoured nation status (after he said he wouldn't do it). I'd bet cash money that he did it to satisfy his benefactors, fellow Arkansas folks, the Walton family. As in, owners of Walmart, the second biggest importer of Chinese goods in the world, after the USA as a whole, and in front of any other country. The business where Hilary Clinton worked as a corporate counsel, and sat (maybe still sits) on their board of directors. If you buy fr

        • I remember seeing those secret recordings inside Walmart trade shows where they pretty much told companies that if they didn't manufacture their products in China, their products wouldn't be cheap enough for Walmart to sell. I haven't bought anything from a Walmart in almost a decade.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      Aaaaand we are back to square one. Blocking them from Swift does make more sense now.

      Not really. China's trying to be neutral in this fight, but they're going to be dragged into it whether they want to or not. Basically if this turns out to be true, the Chinese banks might end up being severely restricted from SWIFT. And then China will need to make a big decision on which is better - the world, or Russia.

      China won't get involved in a true boots-on-the-ground war, but they are quite capable of an economic w

      • Re: (Score:2)

        by gtall ( 79522 )

        China will get involved in a true boots on the ground war when they think they can get away with taking Taiwan. Free Chinese are anathema to the CCP which needs to see every Chinese under their boot in order to feel good about themselves.

      • China won't get involved in a true boots-on-the-ground war

        Too late, they are involved: https://en.wikipedia.org/wiki/... [wikipedia.org]

        • Too late, they are involved: [link to Wikipedia article on fighting between India and China]

          Where do you think the Ukraine is located, again?

          • The question was whether China is involved in a "boots on the ground war" or not. The answer is yes, they are.

            • Even if it was, that's a 'war' in only the most absurdly loose sense of the word. There has been precisely one incident with fatalities. If that's a war, my Midwestern-US city is in the middle of Armageddon.

  • Where are they getting the money? (Score:4, Interesting)

    by known_coward_69 ( 4151743 ) on Thursday March 03, 2022 @02:31PM (#62323121)

    There are already runs on russian banks and this will only increase the runs. most banks only hold around 10% of deposits

    • There are already runs on russian banks and this will only increase the runs. most banks only hold around 10% of deposits

      The European arm of Sberbank is already insolvent [yahoo.com]. That only took two days to happen. Imagine where things will be on Monday.

      Also related to your question, where will the con artist [thehill.com] get the money to launder from? You know the sanctions are having a devastating impact when criminals whine they don't have access to their money.

      • Re: (Score:2)

        by gtall ( 79522 )

        Russia will find a way to fund that jack ass, it is bet on the next election for them. With that moron in White House, they can help themselves to the Baltic countries and cast eyes on E. Europe.

    • They still want to sell and have somewhere for the payments to go.

      But if the sanctions work the way they should, sanctions should also be going up on any other bank that is filling the gaps and negating the effectiveness of them. I don't if they will.

    • There are already runs on russian banks and this will only increase the runs. most banks only hold around 10% of deposits

      There is cash, it's just in Rubles, which nobody wants. The bank runs are primarily people trying to get US dollars, Euros, or GBP. Since the Ruble is losing value rapidly, and western currency is unavailable, they are switching to holding Chinese Yuan.

      • The Bank of Russia (their national bank) has plenty of international reserves in EU and USA ... that were blocked.
        Some 600 billions of Euros owned basically by the Russian Federation are not usable right now.

    • In the US, there is a 10% "Required Reserve Ratio", so that's what they all hold. I don't know if Russia does the same.
  • With the rest of the world sanctioning Russia while Chinese banks are offering terms, it is their opportunity to be more than simply influential. By temporarily acting as interface for Russian business, China has a chance to take ownership of the all of their assets, and effectively the entire Russian state. This is a way to end it without having to wage war against Russia, but requires that Putin is stupid enough to think he can rely on China and then for China to claim their payment. That will be the end

  • While I don't question the news (and TBH it was quite surprising), I have a few questions regarding the procedure and the intended use of the accounts. Could anyone who is familiar with the subject, or has any business account in any Chinese bank, answer them?

    1. Which documents are needed for a Russian company (or, for that matter, any non-Chinese company) to open a bank account in China?

    2. How are these companies avoiding the decree signed by Putin on February 28 which disallows transferring one's own mone

    • How are these companies avoiding the decree signed by Putin on February 28 which disallows transferring one's own money to one's own accounts opened abroad?

      My understanding of this decree is ordinary people are prevented from transferring their money out of Russia - So Ivan can't transfer his life savings to Barclay's Bank in London to protect it.

      Corporations - Particularly those already kicking up Tony-Soprano-style to Putin and is Oligarchs can still walk into a Chinese Bank in Moscow and open up a Yu

    • According to the summary:

      "who works at the Moscow branch of a Chinese state bank and has direct knowledge of its operations"

      Presumably they are not moving the money out of the country yet.

  • Currency Exchange Rates show a Ruble to be .0093 USD [xe.com]
    Similarly, the Ruble to the RM is also in the tank at .0574 CNY [xe.com]

    What good does it do to open a bank account in China when your currency is worthless? I just did a quick lookup on a website named for a jungle and they have TP for $.28/100 sheets that means I could get 3 sheets of TP / Ruble. Literally shit.

    • It could be seen as a stop-loss kind of deal. Turn your rubles into yuan now, before the ruble tanks even further and you have less yuan later.

      • Sounds like the best time to buy Rubles. Russia will eventually come back, even if we destroy it. Heck, it may come back much faster if we do destroy it.

        • It might, but the value of the Rubles will not go back up.
          The value of a currency is rooted in trust (Switzerland), economic strength (EU) and military power. After this situation, Russia will have nothing left of those three.
          (military power = a mostly unopposed armored column against Kyiv takes a week for a 3-hour drive.... Russia still has no air supremacy over a much weaker army and nation left behind in the upgrades race...).
          Breaking international treaties right, left and center means zero trust.
          Economi

  • And now China controls more Russian business wealth. Income Putin cannot threaten to take 50% of either. You have to admit, Xi has outplayed everyone at everything for 20 years now. He is simply brilliant.

    • You have to admit, Xi has outplayed everyone at everything for 20 years now.

      That would be weird, since he hasn't been in power for 20 years.

  • Currently a number of targeted Russian companies and banks are sanctioned. Many companies are not, but of course they will have an issue doing international payments if their bank is sanctioned. Anyway there is currently nothing illegal about these companies looking for other payment channels, nor for Chinese banks to provide that despite what emotional responses in this discussion seem to think. If a foreign bank would facilitate payments from a targeted oligarchs company, that would be a different matter.
    • In addition, an important element in the article is that this may help the prospects of the yuan becoming a premier international settlement currency.

    • "Many companies are not, but of course they will have an issue doing international payments if their bank is sanctioned. "
      Export of things might also be iffy, as Russian related ships start to be forbidden docking rights. Transport costs will skyrocket.

  • To spite one's face.

    Any port in a storm.

    But this particular port is subject to monsoons, tsunamis and waterspouts.

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