Problems with settlements in Russian-Chinese economic relations have seriously damaged bilateral cooperation, causing concern among entrepreneurs. Lost profits for exporters, losses for purchasers, the search for “grey” payment schemes, and rising prices for goods for the end consumer are forcing Russian businessmen to look with caution in the direction of China.
We see how secondary sanctions, which until recently seemed like an ephemeral element of American discourse, are dealing a tangible blow to the “best relations in history” between two sovereign states. It turned out that Washington’s discursive power is so powerful that simple threats are enough to make Chinese banks refuse to accept payments from Russia in any currency, and transfers from other countries and from people with Russian surnames, are subject to additional checks. Transactions of any size, including such large projects as Arctic LNG-2, have come under attack. It is clear that our Chinese partners are acting in a spirit of pragmatism and behaving cautiously, trying to protect themselves from economic problems in cooperation with the US and the EU, whose markets are still of greatest interest to them.
Since 2014, Russia has been attempting to build a financial settlement system independent of Western counterparties, which involves switching to mutual settlements in national currencies and abandoning SWIFT. Successes in the first of these (in 2023, according to Russian estimates, the share of mutual settlements with China in national currencies was 95%) did not ensure the invulnerability of bilateral economic cooperation, since an alternative to the American payment system was never introduced, although the integration of the national SFPS and CIPS has been discussed many times.
The cooling of interest of Russian entrepreneurs in the Chinese market and the search for new external partners as a way out of the current situation for domestic business are also associated with difficulties. Even among friendly countries, their list is very limited for the same reason – Western players can put pressure on them at any time using the same methods.
Taking into account the new input and rapidly changing external circumstances, businesses are looking for ways to solve problems and are using all sorts of “grey” schemes – from attracting payment agents and intermediaries in third countries to barter exchanges. Attempts to work with third-tier local banks in China are still an option for solving business problems in the short term, but they are not always successful.
China has accumulated significant experience working with countries that have been under sanctions for a long time. Financial structures created specifically for interaction with Russia, similar to those that provide settlements with the DPRK and Iran, are the most obvious solution, but require significant time and material resources due to the volume of Russian-Chinese economic cooperation. The only branch of a Russian bank in Shanghai is facing difficulties, and is simply unable to cope with the volume of demand for its services. Even taking into account the plans of Alfa-Bank, Sberbank and Gazprombank to follow its example and open representative offices in China, it is hardly possible to talk about a solution to a problem that has a cumulative effect.
All of the listed options are akin to treating the symptoms rather than the causes of the disease. At the moment, in addition to unreliability, increased transaction costs and other material costs, such a state of affairs causes reputational damage to the parties involved. The discursive policy of the PRC, reflected in the modern foreign policy concepts it addresses to developing countries, is aimed at forming the image of China as the leader of the global South. The track of China’s cooperation with Russian partners is forced to slow down due to Beijing’s pragmatic and cautious policy, since it is necessary to take into account Washington’s threats. In the context of a dynamically changing international situation, developing countries may have concerns – if the United States does not like their policy (external or even internal), will China suspend cooperation with it?
It turns out that the sword of Damocles hangs over the relations of sovereign states – in the event that a country behaves in a way that is unacceptable to Western countries, its external cooperation can be sharply limited, and not only with the help of economic instruments – it turns out that sometimes discursive methods are enough.
Global changes in the system of international relations, the main examples of which are the movement towards multipolarity and the increase in the weight of developing countries in world economy and politics, have become one of the signs of the current historical moment.
This trend is reflected, among other things, in the increased interest of countries in organisations without a dominant leader such as BRICS, which already unites 10 states representing 45% of the world’s population. It seems that a turning point has come when the association has a chance to show its significance and effectiveness in terms of solving issues that do not have only an economic but also an ideological dimension for the countries of the world majority. Problems in mutual settlements between Russia and China can be solved by introducing the BRICS Pay system.
Based on blockchain technologies, it can become an analogue of SWIFT for transactions in national currencies. Its development has been underway since 2018, [https://brics-pay.com/ ] and the major banks of the member countries of the association (Sberbank, VTB (Russia), ICBC and Bank of China (China), Petrobras (Brazil), State Bank of India) have already even begun to develop corresponding mobile applications. It is assumed that settlements through this payment system will be carried out via national digital currencies. In Russia, the possibility of settlements with China through the use of digital currencies is being actively discussed, but in order to implement this practice, it is necessary to soften the positions of national regulators on cryptocurrencies.
Thus, the problems that have arisen in the best Russian-Chinese relations in history, are not only important for the economic cooperation between the two countries. In the context of tectonic shifts occurring in the system of international relations, they are acquiring a global dimension. BRICS as an association has received a historic chance to show the world that mantras about genuine multipolarity are not just loud slogans. If the BRICS Pay system is implemented, the countries of the World Majority will be able to conduct economic policy without looking back at third players dictating their terms depending on the political situation. If Russia and China are able to resolve current difficulties by becoming pioneers in the field of cross-border digital mutual settlements, the development of the world economy has a chance to change its vector, the weight of developing countries will increase significantly, and strategic sovereignty will acquire real, not declared outlines.
