Chinese banks began blocking payments from Russian companies for components for electronics assembly
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Since the end of March, Chinese banks began blocking payments from Russian companies for components for assembling electronics, market participants say. According to them, the first difficulties with payment, which arose back in December, concerned mainly finished products. Now there are problems with components for servers, storage systems and laptops. Experts note that China is actually a monopoly supplier, so Russian companies may experience serious difficulties and production delays.
Since the end of March, domestic electronics manufacturers have been receiving letters from Chinese partners stating that payments from a Russian legal entity are not going through Chinese banks, a source among market participants told Kommersant. According to him, banks began to block payment for the supply of components and kits for assembling electronics (“kit kits”, which include processors, device cases, screens, etc.), including servers, data storage systems (DSS), laptops and etc.
Kommersant’s source clarified that payment is blocked “even for those organizations that have entered into long-term contracts for the production and supply of components for electronics assembly with Russian clients.”
“China, in fact, has a monopolist in the component base. Almost 100% of the world’s supply of components for electronics assembly is on their side,” he says.
The IT holding Fplus confirms information about the problems: “We, like all leading industry players, are under pressure from secondary sanctions and are working to mitigate their consequences as much as possible.” The founder of JSC Sovereign Mobile Initiative Holding (SMI Holding), Alexander Kalinin, also confirmed to Kommersant the problems with paying for services for the supply and production of electronics through Chinese banks.
According to Mr. Kalinin, since December 2023, Asian financial structures “have not missed payments for goods from Russian legal entities for the supply of finished products” (computers, storage systems, servers, etc.), and since the beginning of April, problems have arisen with components and “kit kits” “: “Domestic developers who ordered components from China cannot begin the final assembly of their products in the Russian Federation.” He believes that “the Central Bank of the Russian Federation should intervene in the situation and agree with the Chinese side on payment.”
In January, Bloomberg reported that after the US threatened Chinese banks with sanctions if they detected cooperation with the Russian Federation, they tightened control over operations. Izvestia wrote that large Chinese banks, including Ping An Bank, Bank of Ningbo, China Guangfa Bank, etc., stopped accepting payments in yuan from the Russian Federation.
Problems with financial logistics through Chinese banks are observed in payment for almost all goods and services, says Vitaly Mankevich, Chairman of the Russian-Asian Union of Industrialists and Entrepreneurs (RAUIE):
“In December 2023, the American regulator gathered the heads of Chinese banking organizations and threatened to impose sanctions against them if cooperation with Russian legal entities was revealed. Therefore, the prospects are not bright yet.”
He adds that payment blocks affected “almost all Asian banks.”
The president of the customs and logistics broker KBT, Yulia Shlenskaya, said that “the general problem with payments to China began to grow around February and, one might say, reached its climax in April.” She estimates that more than half of importers do not receive payments to Chinese recipients, regardless of whether the product is sanctioned, the sending bank, or which Chinese bank the Chinese supplier uses. Ms. Shlenskaya added that for this reason, shipments of goods from China have fallen by about three times, and payment schemes have still not been found to ensure payment is received with certainty.
Alternative payment scenarios are now being worked out, notes a Kommersant interlocutor among Russian electronics manufacturers, but this problem “delays the production of domestic electronics for about six months, since in the next two to three months there will be no shipments of components and assembly kits to any Russian manufacturer “
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